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Glu Mobile Picks Up Griptonite, Blammo After Narrowing Losses

Glu Mobile Picks Up Griptonite, Blammo After Narrowing Losses

August 2, 2011 | By Frank Cifaldi

San Francisco-based mobile game publisher Glu Mobile has announced the acquisition of two major mobile developers, following a fiscal quarter that saw revenue growth and a reduction of losses.

First up is Griptonite Games, a Foundation 9-owned developer known primarily for its licensed portable games, including renditions of Captain America: Super Soldier, Green Lantern: Rise of the Manhunters and Ben 10 Ultimate Alien: Cosmic Destruction for handhelds. The studio will develop freemium games for Glu that will be launched in the second fiscal quarter of 2012. Its staff of 200 "approximately doubles" Glu's internal development capacity.

In order to close the acquisition, Glu issued over 6 million shares of common stock to Foundation 9. As part of the deal, 17 key employees have signed an undisclosed non-compete agreement.

Second is Blammo Games, the Toronto-based mobile developer that recently signed a publishing deal with the company. Blammo founder Christopher Locke previously led the studio responsible for Smurfs' Village and Zombie Cafe for Capcom Mobile.

Glu has agreed to completely purchase all of Blammo's issued and oustanding shares, issuing 1 million shares of its own common stock with up to 3,312,937 additional shares to be paid if Blammo reaches certain revenue milestones during periods ending March of 2015.

"We are very pleased to have completed these acquisitions, as they represent an important step in scaling our business and executing our social mobile games strategy," said Glu CEO Niccolo de Masi in a statement.

"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. We look forward to the exciting contributions that the Griptonite and Blammo teams will collectively bring to our 2012 social mobile gaming pipeline."

For its fiscal quarter ending June 30, Glu reported an net loss of $1.8 million, down from the $3.2 million loss it reported a year ago. Revenue was up 11 percent at $17.7 million from $16 million, which was higher than the $16.45 million anticipated in an analyst survey by FactSet Research.

Of that $17.7 million, $9.4 million (or 53 percent) was generated from smartphone games, a growth of 58 percent over smartphone revenue reported last year. According to statements made during an investors conference call on Tuesday, smartphone revenue was over 50 percent for the first time in company history, and was reached earlier than it had anticipated.

The company's non-GAPP revenue for freemium games during the quarter was reported at $7.659M, up 64 percent from what was reported one year ago. Its total installs across iOS, Android and social networking games totalled 31.8 million for the quarter, bringing the company to 101.9 million installs life-to-date.

"Our strong second quarter results highlight the continued successful execution of our social mobile gaming strategy," said Glu CFO Eric R. Ludwig. "With the increased scale from the recently announced acquisitions, we are well positioned to accelerate growth in 2012, while at the same time, maintaining our strong balance sheet."

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