Shift to freemium delivers impressive revenues for Q2 2011 (but no profit yet).
Mobile games publisher Glu Mobile has announced its financial results for the second quarter of 2011, reporting revenues of $17.7 million, up from $16 million in Q2 2010.
However, that wasn't enough to turn a net profit for the company, as it recorded a GAAP net loss of $1.8 million, although that's significantly down on the $3.2 million loss a year ago.
Glu says Q2 was its first ever quarter when smartphone revenues were more than 50% of its overall sales, buoyed by 31.8 million installs of its games during the three-month period. Overall, Glu has notched up 101.9 million installs to date, although that covers iPhone, Android and Facebook - and is installs rather than active users.
Glu's GAAP smartphone revenues were $9.4 million in Q2, and $9.7 million on a non-GAAP basis. Of that latter total, $7.7 million came from micro-transactions, in-game advertising and offers.
Alongside the financial results, Glu announced two acquisitions of developers. It has bought US studio Griptonite Games and Canadian outfit Blammo Games. Both purchases are stock-only transactions.
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"The integration of these acquisitions will approximately double our studio capacity dedicated to freemium titles, as well as add proven casual, freemium DNA to our team," says Glu CEO Niccolo de Masi.
Meanwhile, Glu is also having another crack at the Chinese market through a partnership with TOM Group. The two companies are teaming up to launch a smartphone storefront in China under the Glu brand. It will go live in the fourth quarter of 2011.
The publisher will be hoping this deal works out better than its acquisition of Chinese mobile games company MIG in 2007, with staggered earnout payments in that case ultimately becoming a millstone around Glu's neck before it shifted focus to freemium games.
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