Earnings Call: Glu Sheds Conservative Approach To Smartphones; 40 Percent Of Efforts Focused There
Glu Mobile (NSDQ: GLUU), a worldwide mobile games publisher and distributor, said during its call today that it remains committed to selling games through carriers, but is playing catch-up when it comes to building games for “next-gen” platforms, such as the iPhone, Android and N-Gage platforms. The new focus comes at a time when the company continues to lose money, is reducing headcount and is being forced to trim back on expenses in order to afford the remaining payments it must make from an acquisition. Here’s highlights from today’s call:
SEE ALSO: Earnings: Glu Mobile Records Wider Q4 Net Loss Amid Restructuring
Earnings release | Earnings call (4:30 PM ET)
—Attention to new platforms: Glu’s CEO Greg Ballard said that 30-40 percent of their studios’ time is focused on next-gen platforms, like the iPhone, Android and N-Gage platforms. “We’ve been clear in saying we were conservative in our launching of games for the iPhone, but those games we have launched have done well. But something clear is that games on the iPhone have to rank in the top 50 to generate profits. The company has four titles coming out soon for the iPhone, one of which has a lot of “internal excitement at Glu.”
—Licenses for the iPhone vs. Android: Ballard said that some of the console and casual online game companies that they work with normally are launching their own iPhone games and Glu won’t have the rights to the intellectual property. Ballard said Android will be different. “For one, we have the ability to take all licenses to the platform. The language in our contracts gives us the rights to Android…It will require more customization, as each carrier will have a different handset, but we have already see this for Windows Mobile and BlackBerry devices, so it plays to our strengths.
—Committed to carriers: Ballard said the company remains committed to the carrier deck, and there’s even some opportunities sinec players, like THQ (NSDQ: THQI), are pulling out of the carrier market to focus exclusively on smartphones. He said other trends is that they will be able to lower their porting costs by reducing the number of handsets they support, and that they are beginning to see movement by carriers on more positive margins (driven by the pressure from Apple’s 70-30 split, and the fact that Google (NSDQ: GOOG) is also promising a similar split.). “In short, we remain committed to carrier business, even though we are dedicating a lot of resource to the next generation of handsets. In retrospect, we should have shifted our focus to the higher-end platforms earlier in 2008.”
Posted In: Entertainment, Games, Money, Earnings, glu mobile
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