The veteran mobile executive Nick Earl has joined Glu Mobile as its new president of global studios - the high point of an otherwise disappointing Q3 for the company.
Earl left Kabam in September after serving less than a year as its president of worldwide studios. Prior to that, he was senior vice president of EA Mobile, where he was instrumental in the company's embrace of the free-to-play model. Some of the big hits created on Earl's watch include Marvel: Contest of Champions, The Simpsons: Tapped Out and Real Racing 3.
Glu CEO Niccolo De Masi emphasised Earl's track record in an official statement released today. "Under Nick's leadership we aim to improve the hit-ratio from our worldwide studios," he said. "We look forward to his contributions both centrally and across our product roadmap."
And the company could use another hit, if its Q3 results are any indication. Though Glu managed to narrowly beat expectations, it reported a decline in both revenue and profit in the third quarter.
Glu earned $63.3 million in GAAP revenue in Q3, down from $64.8 million year-on-year. Non-GAAP revenue was $64.4 million, down from $83.6 million. The drop in net profit was more dramatic. On a GAAP basis, Glu made a profit of $158,000, a steep decline from the $10.4 million it earned in the same quarter last year. Non-GAAP net profit was $7.7 million, just under $10 million less than in Q3 2014.
"At this level of performance, virtually no bonuses will be paid anywhere [in] Glu for the year"Niccolo De Masi, CEO
In a call with investors, De Masi emphasised the growing dominance of a small number of constantly updated mobile games, resulting in an audience that is less inclined to try new experiences.
"We believe this is symptomatic of a maturing industry," he said. "The near-term impact of our landscape maturation has been the significant underperformance of anticipated install for important Q3 launches, including Deer Hunter 2016, Eternity Warriors 4, and James Bond World: World of Espionage.
"All three titles in a row under indexing on installs, unfortunately very materially impacts our Q4 operating expectations, which we currently expect to slow into 2016. Our landscape, where it is more challenging to generate new hits, in effect solidifies the position of existing franchises and scale leaders in our sector. We believe this dynamic will ultimately encourage consolidation and the creation of ever larger players with healthy operating margin."
De Masi indicated that, due to the strength of Glu's balance sheet, it may well contribute to that trend of consolidation. In the meantime, however, Glu has lowered its expectations for Q4, with De Masi adding, "At this level of performance, virtually no bonuses will be paid anywhere [in] Glu for the year."