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Glu Mobile revenue drops 16% on 2008

Q2 financial report shows total revenue of $19.9 million; Activision deal expected to lift company's 2nd half results

Glu Mobile has reported revenue is down 16 per cent in this second quarter compared to last year. Its latest financials show revenue for the period was USD 19.9 million, down from USD 23.7 million for the same quarter in 2008.

The result was, however, above estimates for the quarter of USD 19.2 million and, notably, meant the company has reached positive operating cashflow a quarter earlier than expected, driven - said the company - by effective cost cuts and reduced royalty payments.

Estimates place the business's Q3 sales at around USD 19 million; pointing to softness in Europe owing to seasonality and carrier issues as reasons for the drop. However, forecasts for the whole of the FY09 were raised slightly, with Glu's deal with Activision to publish games based on some of its biggest franchises expected to generate significant income. The licensing deal gives Glu the publishing rights for Call of Duty, Guitar Hero, Blur, Tony Hawk and Crash Bandicoot.

The mobile publisher notes that it seems to be benefiting from staying committed to traditional handsets - while competitors such as Gameloft and EA have developed a larger presence on iPhone, Glu is filling the gap they have left.

A recent announcement from Verizon that it will be modelling its commission structure on Apple's 70/30 split will also benefit Glu, by offering a higher-than-usual slice of profits.

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