With 22 million likes on her official Facebook page, and an identical number of followers on Twitter, there's no doubt that Kim Kardashian is popular. Believe it or not, investors stand to gain from her popularity, as mobile gaming company Glu Mobile (GLUU) is leveraging that fact to its advantage. On Monday, Glu shares soared as much as 10%, with Kardashian being the catalyst.
One of Glu's latest games, Kim Kardashian: Hollywood, has hit gold, becoming the most downloaded free app on Apple's (AAPL 0.64%) iOS store, according to App Annie. More importantly, the game is now the No. 5 highest-grossing app on the iOS store in terms of in-app purchases. In fact, the revenue potential of the game is huge.
A big windfall
Cowen analyst Doug Creutz expects the game to push Glu's revenue beyond $200 million this year. Clearly, Kim Kardashian: Hollywood is set to become a big money spinner for Glu, which reported $113 million in revenue last year. As such, it is expected that the game will double its revenue this year. In an interview to Bloomberg, Glu CEO Niccolo de Masi said, "It might be our biggest game of the year. We're not surprised. Kim is a one-of-a-kind talent with an incredibly precise fit to the game engine that we tailored, but already had in the company."
From RoboCop to Hercules to James Bond
Glu has been following a smart strategy of leveraging the brand equity of popular individuals, and Kim Kardashian is not the first example. Earlier this year, it launched RoboCop at around the same time when the MGM movie was released. The game raked in $3.5 million in revenue during the quarter, accounting for almost 8% of Glu's total revenue in a very short time.
Now, it is tapping the upcoming launch of the Dwayne Johnson-starrer, Hercules. Glu released the official game earlier this month, and it appears to be doing well. On Google Play, the game has a four-star rating. Once the movie hits theaters on July 25, Glu can expect a bump in the number of installs from movie goers inspired to get deeper into the characters and the 12 epic labors.
Another major catalyst is the upcoming James Bond game, set to be released next year. Glu penned an agreement with EON Productions and MGM Interactive in April to develop the first free-to-play mobile game based on the James Bond franchise. James Bond has a cult status, with its popularity cutting across generations. The franchise has earned $3.7 billion in revenue from ticket sales since Sean Connery started portraying the character, according to Bloomberg.
Clearly, Glu Mobile is following an impressive strategy to diversify its gaming portfolio. The company has a number of established hits already, including the likes of Contract Killer, Deer Hunter, Eternity Warriors, and Frontline Commando, and this list seems to be growing. Glu recently acquired PlayFirst, which has successful intellectual properties such as Diner Dash, Cooking Dash, Hotel Dash, and Wedding Dash to its credit.
Don't forget Apple
Glu has a number of games in its kitty to continue benefiting from mobile growth. As stated earlier, the company's games have consistently been successful on Apple's platform. For instance, Dino Hunter: Deadly Shores, released on July 10, became the "No. 1 Top Free App ranking on the App store for iPhone in nine countries and set company records for global single-day downloads," as Fool contributor Steve Symington pointed out.
Going forward, the launch of bigger iPhones from Apple will put the iOS platform into more hands. AppleInsider believes that large-screened iPhones will drive "massive upgrades," pulling users from the Android ecosystem into Cupertino's fold. This will open up more opportunities for Glu in the mobile gaming market.
The bottom line
Glu Mobile has almost doubled in 2014, but with the way things are progressing, more upside cannot be ruled out. The gaming company is employing shrewd strategies, and is using the technology gained over the years to deliver a solid experience to users. So, with the mobile gaming market expected to grow rapidly, Glu Mobile is one of the prime picks to profit from this opportunity.
