Shares of mobile game publisher Glu Mobile (NASDAQ:GLUU) are up more than 70% in the past 12 months, outperforming most competitors, including Zynga (NASDAQ:ZNGA) and Electronic Arts (NASDAQ:EA).Bullish momentum was mainly driven by the company's latest hit, Deer Hunter 2014, which has achieved more than 40 million downloads so far.

Investors looking for exposure to mobile gaming need to consider how much upside potential is left after Glu Mobile's amazing one-year rally. With a market cap of $325 million, Glu Mobile is still a small player in the fierce gaming industry. Its focus on delivering quality content, strong product development capabilities, and new monetization approach suggest the company still has significant upside. Will Glu Mobile continue delivering solid top line performance?


Source: Glu Mobile Investor Relations

Glu Mobile could be the next Zynga
The games industry is well-known for being a "hit or miss" business. This is because, when it comes to games, consumers' preferences are quite volatile and unpredictable. However, certain companies have been able to consistently deliver top hits. An example is Zynga and its FarmVille series, which have generated more than $1 billion through in-game revenue.

Glu Mobile, which shows a genuine potential for developing hits, could be the next Zynga. More important, because Glu Mobile is building a solid portfolio of revenue-generating games, the company's potential revenue not only looks big, it also appears to be well-diversified. The company is a very efficient organization in terms of product development, because with less than 600 people, it has been able to release more than 70 games since December 2008. Just in the first quarter of 2013, the company released seven new titles, all of them featuring original intellectual property.  

Deer Hunter 2014 could bring millions in additional revenue
According to the latest earnings call, Deer Hunter 2014 added $2.7 million dollars to Glu Mobile's third quarter revenue in the 14 days it was available on iOS in the U.S. market. Since then, the game has also become available on Android devices. More important, the title has been successfully released in other regions, and it has remained in the top ten grossing games across all systems on AppAnnie. These facts suggest Deer Hunter 2014 could help Glu Mobile to beat its own fourth-quarter revenue estimate.

Glu Mobile will soon be profitable
Although Glu Mobile is not profitable at the moment, the company's new monetization approach and active release cycle suggest it may be able to cross over into profit early this year.

Early in 2013, Glu Mobile embraced the concept of "game as a service," in order to improve monetization. The company's monetization team used this new approach with its Heroes of Destiny title. The team changed the game's focus, from emphasizing single-player exciting experiences, to focusing on creating a consumable economy inside the game, with deep meta-game systems and socially driven gameplay.

Soon after the new approach was used, the game's average revenue per daily active user started improving considerably. In this way, Glu Mobile could benefit enormously from this new monetization approach. 

Borrowing ideas from EA Sports
Games publishers can build a strong brand faster by specializing in a particular segment. This approach was used by Electronic Arts, which specialized in the sports genre with its Fifa series. Now, according to Morningstar, Electronic Arts accounts for nearly 50% of sports game sales in the whole game industry. Glu Mobile seems to be taking a similar approach, by specializing in shooting games.

Final Foolish takeaway
Glu Mobile seems to be well prepared to go to the next level. The company's new monetization approach, specialization strategy, strong release cycle, and solid portfolio of games should contribute to a meaningful improvement in top line performance. Moreover, the firm's latest hit, Deer Hunter 2014, is set to bring millions in additional revenue, allowing Glu Mobile to cross over into profit early this year. 

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Adrian Campos has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.