The mobile games industry still has to figure out a lot, and there’s no better confirmation of that than listening to Glu (NSDQ: GLUU) Mobile’s third-quarter earnings call, which detailed a laundry list of concerns, ranging from industry-specific things, such as figuring out what business model works best to the impacts of the poor economy, and things specific to Glu, such as its shrinking cash position as the final payment comes due on an acquisition. Glu’s CEO Greg Ballard: “We are disappointed in our Q3 performance…We expect these conditions to continue and are assumptions are reflected in our fourth-quarter outlook. It’s unfortunate that these economic conditions are occurring when there’s a significant shift occurring to the next generation platforms. There’s short-term challenges, but there will be a new path for the industry, and Glu specifically.” The company’s stock sank four cents, or nearly 5 percent, to close at 81 cents a share.

Release | Earnings Call.

Highlights from the call after the jump

—Shrinking cash position: At the end of the Q3, the company had $19.9 million in cash, and they expect to have about $17 million by the end of the year, not including an $8 million credit facility. However, next year, the company will have to pay an additional $25 million in cash and stock to the shareholders of MIG, a Chinese mobile game company it acquired. The first installment is due in the first half of 2009. To help, the company has reduced its expenses by 8 percent over the last few quarters, and forecasts cash-flow break even in the first half of the year, not including the payments. “We believe we have the means for cash,” said Eric Ludwig, Glu’s CFO.

—Carrier model declines: Ballard said that there’s been substantial growth among smartphones, with the adoption of Windows Mobile and RIM (NSDQ: RIMM) Blackberry devices, however, it’s negatively impacting the company’s traditional carrier business. With new smartphones, customers become “untethered to the games business because they [smartphones] aren’t integrated into the provisioning infrastructure.” Instead, they rely on third-party resellers like, Handango. “It’s a more cumbersome process for consumers, and a smaller revenue share for publishers.” That’s not the case with the iPhone, N-Gage and Android, which provide marketplaces for buying games. However, customers using those devices were likely the ones downloading games from the carriers before.

—On the new platforms: Ballard said the new platforms will take time to evolve with larger impacts being seen in 2009 and 2010. “We remain enthusiastic for N-Gage, but it’s still in the early stage. It’s not meaningful for any publishers, but it’s growing weekly.” On Google: “The initial results have been very encouraging. Our two games have been among the most downloaded, and now we have 10s of thousands of people playing our games on the G1.” On the iPhone: “We took a measured approach…Perhaps we may have been too cautious for the iPhone, however, compared to other companies that were more aggressive, neither EA or Gameloft (EPA: GFT), have gotten a substantial lift from the iPhone in Q3. But we are poised for the more the more substantial opportunity in 2009 and beyond.”

—New business models: Ballard said there’s a lot of new options, including several advertising-based models. “In the carrier world, we had difficulties doing any innovation because we had an existing install group of games, and we risked cannibalizing new revenue. In the new world, we don’t have a big install base of games, and there’s a system that’s more flexible than the carrier models. We intend to do some innovating over the next few months. We don’t know what the results will be, but it opens up new path to monetizing that didn’t exist six months ago.”

• Earnings: Glu Mobile’s Q3 Loss Widens; New Platforms Aren’t Enough To Dig Out Of Economic Problems