In the electronics world, getting a corner on the gaming market is serious business, however fun or frivolous it may appear. Like any game, the industry and the companies within it are subject to the vagaries of the market, and when the winds of change hit, they hit some firms harder than the rest.
Such was the case this week with the fortunes of San Francisco-based Glu Mobile (NASDAQ: GLUU). The publisher of mobile games for smartphone and tablet devices, and maker of such popular games as "Call of Duty", "Guitar Hero," "Contract Killer Zombies" and "Contract Killer Zombies 2" took a few lumps as November wound down, with the release of new products, but a bottom line it would like to forget.
First, the bad news; mid-November brought tidings that some employees may not enjoy the happiest Christmas ever, with word that several of them were being laid off amid the closure of one of its offices and cuts to staff at two others. The company closed its office in São Paulo, Brazil, and cut staff in Kirkland, Wash., by 25% and in San Francisco by 5%.
Glu also lowered its guidance for 2012, as the company now expects to bring in only between $19.5 million and $20.5 million U.S. in revenue for the fourth quarter.
On the other hand, this month, GLUU, which offers products to multiple platforms including iOS, Android, Amazon Windows Phone and Google Chrome, announced its new game, "Contract Killer Zombies 2.”
As the press release explains the game, "in the sequel to Glu's popular original first-person zombie shooter, players assume the role of Evelyn - Shooter's heroine sidekick.
"Equipped with deadly firearms and new melee tactics, players are able to freely move around their environment as they guide Evelyn through numerous mission types in the Safehaven Research Lab."
To close out a turbulent month, GLUU got word that things are set to mushroom in the gaming industry, growing a much larger pie of which GLUU would like to obtain a larger slice. Financial experts watching the industry say that the mobile gaming market is expected to reach $12.3 billion U.S. in sales this year, and increase to $15.2 billion U.S. by 2015. Those numbers equate to a combined annual growth rate of 12.3% from 2011 to 2015. That’s because the gaming market is no longer dominated by PCs and consoles.
As for GLUU itself, shares of the company fell sharply earlier this month as the company warned fourth-quarter results would be impacted by poor performances of games launched in the third quarter. Revenues in the fourth quarter are expected to be between $19.5 million and $20.5 million U.S.
Stock for GLUU hit $2.86 U.S. at Friday’s close, down a penny from the previous day. It has to pull up its socks considerably to achieve its 52-week high of $5.90 U.S., touched in July, but working its way from a gully for the last 52 weeks of $1.99 U.S., plumbed two weeks ago.
