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Glu Mobile Is a Good Long-Term Growth Pick

July 24, 2014 | About:

Glu Mobile (NASDAQ:GLUU) has put in a good performance. However, talking from a long-term perspective, its prospects seem promising, mainly on account of its solid presence on Apple’s app store. Moreover, as Apple is looking to expand its addressable market with bigger phones, it will provide more room for Glu to grow its business.

Key steps

Glu has taken some decisive steps to address three key areas namely: monetize its games in a better way, optimize games more predictably, and market its titles more efficiently. Moreover, its investment over the past one year has started yielding results for the company. It is focused to leverage its strengths and early mover advantage to create long-term gaming franchises. Currently, it has four successful franchises to its credit namely, Contract Killer, Frontline Commando, Eternity Warriors, and Deer Hunter.

The company had also launched several other games such as Eternity Warriors 3, which includes features such as real-time chat, player-to-player messaging, and guild tournaments. During the beginning of this year also it launched three new free-to-play games including RoboCop, Defenders & Dragons, and Motocross Meltdown. Moreover, the company has high hopes for these games and expects them to perform well this year.

Better performance in the cards

The company is looking forward to doubling the revenue of each new game it releases. Moreover, Glu seems to achieve this target with both Deer Hunter 2014 and Eternity Warriors 3. A similar trend is expected to be followed by RoboCop and Motocross Meltdown. However, the company will remain focused on action games for the entire year and moving forward with its plans to continue its games-as-a-service evolution. The company’s expertise in logistic solutions and android platform will further enhance its growth.

Glu is focusing on its growth along with improving its operational efficiency. Moreover, as the free-to-play games industry has expanded exponentially, it has immense opportunity to grow in this market segment. Moreover, its franchise diversification and ability to leverage central services for all its studios has created a superior and highly scalable risk profile.

Apple prospects

The company has positioned itself for growth with various big names such Apple, Google, and Microsoft. Apple is one of the key clients of the game maker, which accounts for nearly two-third of Glu Mobile’s revenue. The mobile giant is increasing its footprint around the world by launching bigger screen devices.

According to analysts:

The 5.5-inch model may be positioned as a phablet, according to the analyst. It will come out later in the holiday quarter and may eat into sales of the iPad Mini. The 5.5-inch model will pack a big battery with 50% to 70% more watt-hours than the 5S.

Only the high-end phones, such as the 64GB version of the 5.5-inch device, will get a sapphire screen cover, according to the analyst. The 4.7-inch model will be the most popular, Kuo claims, with full-year shipments hitting about 60 million units.

This is one of the strategic moves on the back of which Glu will be able to differentiate itself from its peers. Moreover, as iOS is one of the main sources of the company’s revenue, Apple’s phablet will open up new doors for Glu.


If we look at the statistics, Glu's stock has not performed much this year, but going forward, Glu seems to be well positioned for growth. Moreover, the company has a strong portfolio of innovative games and its tie up with Apple will further fuel its growth. Thus considering these factors Glu Mobile seems to be a good investment option.

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