Glu Mobile hits a speed bump with its mobile games
Mobile games have been gaining a lot of popularity lately, but there could be trouble on the horizon. Glu Mobile, a leading developer of mobile games, is forecasting a larger-than-expected loss for the latest quarter of 2013. This forecast comes on the heels of losses seen during the second quarter of the year. Glu Mobile has seen the sale of mobile games and the spending within these games drop somewhat among smartphone and tablet users this year.
Consumers may be showing fatigue when it comes to mobile gaming
Mobile games have managed to attract a great deal of interest in recent years, proving to be alluring to consumers because of their convenient nature and, in some cases, addictive design. These games have seen impressive growth in several parts of the world, but Glu Mobile suggests that consumers could be experiencing some degree of fatigue when it comes to mobile gaming. A lack of innovation could also be a problematic issue as more mobile games begin offering similar experiences.
Glu Mobile sees losses during third quarter
Glu Mobile boasts of 40 million active users and primarily generates revenue through advertisements and in-game purchases. The company expects to see revenue call by 16.5% in the third quarter over what it had seen in the same period in 2012. This has led the company’s shares to fall in value by 9%. Losses during the third quarter were larger than Glu Mobile had expected, but the company continues to show relatively strong results within the game industry.
Mobile games could face a troubling future
While consumers have shown a great deal of support for mobile games the variety that these games exhibit has diminished over time. Many mobile games are indistinguishable from one another in terms of experience and gameplay, which has proven unattractive for many consumers. Moreover, the simple nature of these games allows consumers to move from title to title quickly, often without experiencing the majority of what a particular title has to offer.
Chinese mobile games may soon find their way to foreign markets
Chinese game developers may soon flood into overseas markets, using mobile games to reach a vast multitude of new consumers. Several of the country’s prominent game developers have announced plans to make a push into foreign markets, hoping to engage consumers that are interested in mobile games. Many of these consumers have become enthralled with the simplistic, yet addictive nature of these games, and Chinese developers are well versed in making such games. Some developers believe that they could find strong success in foreign markets in the short-term while also enjoying the success they have fostered in their home country.
Domestic game industry boasts of $3 billion in revenue
China’s game industry reached more than $3 billion in revenue at the end of June this year. The industry is experiencing a 36% year-on-year growth in revenue, driven heavily by consumers that have shown strong interest in mobile games. This interest in not exclusive to Chinese consumers, of course, and those with smartphones and tablets in other countries have also become enthralled by mobile games. Some Chinese games are already available outside of the country and have pulled in more than $300 million in revenue.
Developer has plans to acquire foreign studios
Shanda Games, a prominent developer and game publisher in China, has plans to launch two new funds that are meant to invest in the acquisition of mobile game studios within China as well as overseas. The company will release a total of 30 mobile games by the end of this year and plans to carry this momentum into 2014 with new studios that are located outside of China. WeChat, a popular social networking and gaming platform in China, is also expected to find its way overseas in the coming years.
Developers may face challenges in foreign markets
While Chinese companies have high hopes for mobile games in foreign markets, the game industry is notoriously fickle when it comes to such titles. Consumers had once shown a great deal of favor for the games produced by U.S. developer Zynga. After a few missteps, the company is now struggling to find some solid footing in a market that is extremely critical on any degree of failure.
