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Glu Mobile, Inc. (NASDAQ:GLUU)
Q4 2018 Earnings Conference Call
Feb. 4, 2019, 5:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, ladies and gentlemen, and welcome to the Q4 2018 Glu Mobile Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. If anyone should require operator assistance during the conference, please press "*0" on your telephone keypad. As a reminder, today's conference is being recorded.

I would now like to turn the call over to Harman Singh, VP of Finance and Investor Relations. Sir, please begin.

Harman Singh -- Vice President of Finance and Investor Relations

Thank you, Operator. Good afternoon, everyone, and thank you for joining us on Glu Mobile's Fourth Quarter 2018 Earnings Conference Call. On the call today are Nick Earl, President and Chief Executive Officer, and Eric Ludwig, COO and Chief Financial Officer.

During this call, we will be making forward-looking statements regarding future events and the future financial performance of the company. Any forward-looking statements that we make today are based on assumptions that the company believes to be reasonable as of this date. We undertake no obligation to update these statements as a result of future events. We caution you to consider the important factors that could cause actual results to differ materially from those in the forward-looking statements in the press release and during this conference call. The risk factors are described more fully in our documents filed with the SEC, specifically the most recent reports on Forms 10-K and 10-Q.

During this call, we will present both GAAP and non-GAAP financial measures. The non-GAAP financial measures are not intended to be considered in isolation from, a substitute for, or superior to our GAAP results and we encourage investors to consider all measures before making an investment decision. For complete information regarding our non-GAAP financial information, the most directly comparable GAAP measures, and quantitative reconciliation of those figures, please refer to the supplemental presentation accompanying today's earnings call that can be accessed via our investor website, www.glu.com/investors.

As a reminder, consistent with our financial presentation and for all of the information aside from bookings or otherwise stated below, we will discuss results on a GAAP basis and refer you to changes in deferred revenue, the deferred cost of revenue, and non-GAAP operating expense totals in our financial tables. This data will provide a GAAP to non-GAAP reconciliation of the quarter's financial results based on the same methodology we've used in prior quarters. We're also providing a supplementary Excel file on our IR website to more easily aid in this reconciliation. Both the PowerPoint and Excel file are now accessible on the website. We encourage you to follow along with the slides during this earnings conference call.

And with that, I'd like to turn the call over to Nick.

Nick Earl -- President and Chief Executive Officer

Thanks, Harman. Hello and thank you for joining us for Glu's Fourth Quarter and Full Year 2018 Earnings Call. I'll review highlights from our strong fourth quarter and year and then provide an update on our current titles, new game development plans, and longer term outlook. Following that, Eric will discuss our financial results in more detail and provide first quarter guidance and an update to the 2019 outlook we provided last quarter.

I'm pleased to say that 2018 was a great year for Glu and its shareholders. We achieved record bookings with year-over-year growth of 20%, as well as delivered increasing adjusted EBITDA profitability on a year-over-year basis and significant free cash flow. We also expanded our adjusted EBITDA margin to double digits, reflecting the leverage in our business.

Our strong financial results were due to the successful execution of our live ops strategy through enhanced game experience, improved merchandising, and strategic ad placement. We have a profitable and expanding core business and we are excited about the upside potential of the new launches planned for this year and next.

Glu finished the year on a high note with a strong fourth quarter performance as bookings increased 18% year-over-year to $98.2 million. Bookings were higher than expected and included another quarter of sequential growth from Design Home and Covet Fashion, along with a strong performance from Tap Sports Baseball in a seasonally soft quarter. Adjusted EBITDA profitability also increased for the fourth consecutive quarter and we generated free cash flow of $17.3 million.

These financial results reflect our longer term strategy of creating growth games that deliver repeatable bookings and strong profitability. The annual bookings for Design Home, Covet Fashion, and Tap Sports Baseball collectively grew by 53% year-over-year and contributed 74% of total annual bookings.

In the fourth quarter, Design Home bookings grew 46% year-over-year to $43.9 million, delivering another quarter of outperformance. For the full year, Design Home generated $157.7 million in bookings, compared with $97.7 million in 2017. We continue to add updates and events that drove a meaningful increase in average bookings per DAU. We also have several additional updates that are planned, which we believe will drive further growth.

We are pleased with the early results from the meta game update and closed beta testing and accept meta features to be integrated into the game and live by the end of Q2. We initiated our culturalization efforts and are partnering with Cocone, a Japanese game developer and publisher, to launch Roomage, an international version of Design Home for the Japanese and South Korean markets. Additionally, we will be launching an e-commerce feature through a vertical partner. More to come on this but we expect it to launch by the year end.

Covet Fashion grew bookings to $14.8 million in the quarter, a 49% increase over last year's fourth quarter. For the full year, Covet grew bookings 28% year-over-year to $53.4 million. We have continued to increase bookings, drive monetization, and lower CPIs. We have streamlined our advertising placements, leading to an increase in ad revenue contribution, and created several new updates and series. We rolled out style challenges in collaboration with Disney Games, with the latest series featuring looks inspired by iconic Disney princesses, including Cinderella, Ariel, Jasmine, Belle, and many more.

We continue to expand the social layers of the game through improvements to our fashion houses and rallies. We are also hosting real-world community events, such as CovetCon, a gathering that brings Covet to life by connecting users to explore the game behind the scenes along with some of our brand partners. Looking forward, we are introducing more breadth to the title with the addition of Prop Shop, which will add new forms of content, including accessories like umbrellas, handbags, and strollers.

The Tap Sports Baseball franchise had a better than anticipated quarter with bookings growth of 38% year-over-year despite the traditional seasonal slowdown. For the full year, bookings reached a new record of $75.2 million, growing 57% over the prior year's strong performance. These results were driven by successful updates, which included merchandising improvements, a focus on the elimination of exploits, and value creation for existing user base with new events and features.

Tap Sports Baseball '19 will move into beta next week. The TSB team has fine-tuned the engine and elder game, allowing us to continue building on a great base. TSB '19 will also feature a new cover athlete, in addition to new legends, more club events, improved security against exploits, and a build-out of subscriptions. We believe these new features, combined with our ability to enhance our merchandising and advertising, will lead to continued growth in 2019.

We have three new launches, which are all in various stages of development, that are planned to go live in the May to August 2019 timeframe, tightening our launch range by one month. In his remarks, Eric will provide our outlook for expected bookings contributions for the titles that are currently live in beta.

We continue to work on WWE and are testing a third iteration of the game mechanic. We are optimistic this version will resonate with WWE fans worldwide. We expect this title to be a solid contributor to our portfolio and we look forward to the full launch this year.

Diner DASH Town has been in beta since last quarter and the early results have been promising. The title will go live in three more countries this month, as we continue to make improvements with every new beta release. Stay tuned for additional updates as additional beta results come to light.

Our third game in development is the result of our relationship with the Disney Games team and includes both Pixar and Walt Disney Animation Studios properties. Early testing has shown great engagement and feedback, with strong interest from players. We are pleased with the progress our creative team has made and excited to see this game come alive for our fans. We remain on track for worldwide launch in the early Q3 of this year. However, we have extended development an additional few weeks to include more features in the beta before we begin beta testing the game later in Q1.

Looking ahead, we continue to have a very active development pipeline. In addition to the three titles we plan to launch this year, we have three additional games in various stages of development for the 2020 timeframe. All three of these titles are original Glu IP, providing favorable economics that we believe will position Glu for continued strong growth and adjusted EBITDA growth longer term.

We are excited to share that one of these three titles will be the next generation of our successful Deer Hunter franchise, an IP we acquired in 2012. Deer Hunter Next is being developed by our extremely capable Glu Sports team, the creative force behind our Tap Sports Baseball franchise. The game will incorporate updated graphics and animations, more opportunities for player progression and collection, and a deeper meta layer alongside an existing improved game mechanic that our fans love. Deer Hunter games have been downloaded over a quarter billion times since 2012 and we are looking forward to pairing this download potential with a more engaging and realistic experience for our players. We plan to have Deer Hunter Next in beta in late 2019 and we'll share more details as we progress through the year.

In closing, I'd like to thank everyone for joining today's call and for their continued support, as well as the Glu team for making 2018 a terrific year. We very much look forward to carrying the momentum into this year and beyond. I'll now turn the call over to Eric.

Eric Ludwig -- Chief Operating Officer and Chief Financial Officer

Great. Thank you, Nick, and good afternoon to everyone on the call. I will provide further details on our financial results for the fourth quarter and record full year 2018 and then discuss our guidance for the first quarter and full year 2019.

Our top line results for the fourth quarter and full year 2018 are as follows. Revenue was $95.6 million for the fourth quarter, a 19% year-over-year increase. For the full year, revenue grew 28% to $366.6 million. Fourth quarter bookings increased 18% to $98.2 million over last year's fourth quarter and full year bookings were $384.6 million, a 20% increase over 2017.

I wanted to reflect on the outstanding year we had in 2018. We increased bookings by $64.2 million without launching any new titles. We also saw significant marginal flow through to the bottom line, as adjusted EBITDA margins went from negative to positive double digits.

As Nick mentioned, the quarter and full year bookings growth was driven by continued strong performance in our growth games. The comparisons I will go through for our growth games will be on a year-over-year basis. Our three growth games -- Design Home, Covet Fashion, and Tap Sports Baseball -- in total, contributed 74% of bookings for the full year 2018 and grew 53% year-over-year.

Design Home's bookings grew 46% to $43.9 million in the fourth quarter and reached $157.7 million for the full year, representing a 61% increase. Covet Fashion's bookings grew 49% to $14.8 million and for the full year, bookings were $53.4 million, a 28% increase year-over-year. And the Tap Sports Baseball franchise outperformed the normal seasonal decline and generated $17.2 million of bookings for the fourth quarter, a 38% increase year-over-year, and for the full year, bookings were up 57% to $75.2 million.

Another bright point this quarter was the performance of Kim Kardashian Hollywood, which outperformed both the quarter and full year, with bookings growing 27% to $34.8 million. This strong performance for a 5-year-old catalog title reflects our live ops execution.

For the fourth quarter, bookings from original IP games were 70%, reflecting our investment in Glu-owned IP. Bookings from catalog games, which include our prior evergreen and legacy titles, were down 26% for the full year, in line with our expectations for this grouping of titles.

On the expense side, adjusted platform commissions were $25.5 million. Adjusted royalties were $6.9 million, with hosting costs at $1.6 million. UA and marketing spend was $23.4 million compared to $21.8 million last year. UA and marketing as a percentage of bookings, however, declined from 26.1% last Q4 to 23.8% this quarter. Other adjusted operating expenses, excluding UA and marketing costs, were $29.8 million, flat with $29.7 million in last year's fourth quarter.

The incremental bookings drew up higher marginal flow through, resulting in increased adjusted EBITDA profitability and an improved adjusted EBITDA margin for the fourth consecutive quarter on a year-over-year basis.

We ended the fourth quarter with a cash balance of $97.8 million and we generated $18.8 million of cash from operations in the fourth quarter and $17.3 million of free cash flow. I would point out that in the fourth quarter of 2018, we received four cash payments from one of our channel partners as opposed to the normal three monthly payments. This extra $4 million in net cash receipts typically would have been received in January. As such, fourth quarter free cash flow is higher by $4 million due to this timing of cash collection one month sooner than is typical.

As we look forward to the first quarter of 2019, I would point out that we pay cash bonuses in the first quarter each year. As such, expect cash to decrease in the first quarter, as we will receive $4 million less cash from the channel partner I just discussed, coupled with our normal annual cash bonus payments. However, for the full year, we expect cash to be at least $150 million at the end of the year, which reflects significant free cash flow generation for the last three quarters of the year.

For the first quarter of 2019, we expect bookings of $88 million to $90 million, up modestly on a year-over-year basis at the midpoint. As we pointed out last quarter, Q4 would decline over Q3, as expected, and Q1 2019 would also decrease over the fourth quarter of 2018 due to the seasonal declines from Tap Sports Baseball. Our new version of Tap Sports Baseball will launch in late March 2019 and we expect bookings growth to reignite once launched.

On the expense side, for the first quarter, at the midpoint of our guidance range, adjusted platform commissions are expected to be $23.4 million, adjusted royalties $4.5 million, and hosting costs are expected to be $1.5 million. User acquisition and marketing expenses are forecasted to be approximately 24.2% of bookings while all other operating expenses are forecasted at $31.7 million. We expect to generate a lower adjusted EBITDA profit margin in the first quarter than in the fourth quarter of 2018.

Looking forward to 2019, we believe that the business scales to the next level. We've updated our bookings guidance for 2019 to a range of $435 million to $445 million, up from $415 million to $425 million. This increase is based on continued expectations that our growth games -- Design Home, Tap Sports Baseball, and Covet Fashion -- will benefit from new updates, live ops, and improved meta features and collectively increase 21% to 25% over 2018 bookings. Catalog titles are expected to decline 30% from actual 2018 levels. These two game categories average out to approximately 8% to 11% year-over-year growth across the entire existing core business, which is consistent with the guidance that we outlined last quarter.

We expect that contributions from our two titles currently in beta, WWE and Diner DASH Town, will add $20 million of incremental bookings in 2019. This factors in approximately half of a year of contribution from these two new titles and zero contribution from our Disney Pixar title, which we expect to launch in early Q3. It is important to note that our revised guidance now includes bookings and costs from Diner DASH Town and WWE, as well as the fixed studio development costs for our other games in development, including our Disney Pixar game, the next-generation Deer Hunter title that we announced today, as well as two other original IP games currently in development.

Based on this revised 2019 bookings guidance, we believe that we will generate slightly higher adjusted EBITDA margins in 2019 than the adjusted EBITDA margins in the second half of 2018. From a shaping point of view, bookings and adjusted EBITDA profitability will be the lowest in the first quarter of 2019 and we will see increases across the year as our new titles launch and begin to stack bookings on top of our growth games.

We also expect profitability on a GAAP basis for fiscal 2019 and significant free cash flow generation for the full year, as cash is expected to be at least $150 million at the end of the year. Once we launch the Disney Pixar title into beta, we will gain more visibility and be in a position to provide updated guidance on our next earnings call in May.

Looking even further ahead, we believe that we will remain on track with the margin targets that we discussed on our last earnings call of an adjusted EBITDA margin of between 15% and 20% if and when we achieve bookings of $500 million, and additional margin expansion potential if and when bookings scale above and beyond the $750 million threshold.

As we enter 2019, we are excited about the opportunity to stack new title launch bookings on top of our strong growth games. We are forecasting total bookings to grow 14% before any contribution from our Disney Pixar title. We believe that this will result in growing adjusted EBITDA profitability and generate meaningful free cash flow in 2019 and beyond.

This is an exciting time for the mobile games industry. Research reports from App Annie and Newzoo suggest mobile revenues reached $70.3 billion in 2018, accounting for 51% of the $138 billion global gaming market. This reflects a five-year CAGR for the mobile games market of 32% from 2013 to 2018, expanding mobile penetration of global gaming revenues by 35 percentage points. This means the mobile market is now larger than both PC and console combined, with App Annie predicting mobile revenues expanding to 60% of the market in 2019.

I look forward to updating you on our May earnings call on the progress from our titles in beta, as well as our Disney Pixar title, and will now open the call for questions. Operator?

Questions and Answers:

Operator

Thank you. Ladies and gentlemen, if you have a question at this time, please press "*1" on your telephone keypad. If your question has been answered or you wish to remove yourself from the queue, please press "#". And to prevent any background noise, we ask that you please place your line on mute once your question has been stated.

Our first question comes from the line of Jeff Cohen of Stephens Inc. Your line is now open.

Jeff Cohen -- Stephens Inc. -- Analyst

Hey, guys. Thanks for taking my question. I noticed that DAUs declined sequentially while MAUs increased. Is there anything to read into that or is that just noise? And then I guess maybe could you breakdown how those metrics fared for growth versus catalog, similar to how you guys did last quarter?

Nick Earl -- President and Chief Executive Officer

Yeah. Hi, Jeff. Good to have you on board. Yeah, the DAUs have dropped a little bit and we look at that as the -- as the three growth games have got older, they have increased in DAU, and as the catalog games have got older, they have decreased and, overall, the blended number is down. We don't read into it too much. We'll actually see a big turnaround, we believe there will be a big turn up with our DAUs and MAUs this year as we launch the new games. The numbers that we're watching really closely here are the average bookings per DAU increase and that just speaks to the fact that we're just monetizing so much better, especially in the growth games, and that's really the engine of growth for us this year and even last, as well.

Eric Ludwig -- Chief Operating Officer and Chief Financial Officer

Yeah. And, Jeff, I'd refer you back to the IR deck in the appendix. We've now broken out this quarter both the DAU and the arc DAU for our growth games and for our catalog games. So, really, you saw growth on a year-over-year basis from our growth titles. On the DAU basis, 1.5 million DAU on growth titles last Q4. That grew to 1.7 million from the three growth games. Our catalog titles declined year-over-year from 2.3 million down to 1.5 million, as expected, as you would for these titles.

But I think more impressively and more focusing would be what happened on the average bookings per daily active user. And what you saw there was a 20% increase from the growth titles, growing from $0.40 average bookings per daily active user Q4 last year to $0.47 this Q4. And the catalog titles, even though we had a declining overall DAU base, had a slight uptick from $0.14 last Q4 to $0.17.

But I do think the big trend that Nick talked about is really, as we launch new growth titles, or new titles that we believe will be growth titles, we will be stacking those new title revenues on top of our current growth games. And then we also believe that those will have a higher average bookings per daily active user than our legacy catalog titles so the overall number should be going up.

Jeff Cohen -- Stephens Inc. -- Analyst

Thanks, guys. That's really helpful. I guess just as a quick follow-up, I know you've been rolling out ads more heavily into Design Home and Covet Fashion. What inning would you say we are in that process? And I guess how has that rollout gone so far compared to maybe your expectations?

Eric Ludwig -- Chief Operating Officer and Chief Financial Officer

Yeah. Great question, Jeff. And, first of all, thanks for picking up coverage earlier this month. Yeah, so Covet is really leading the charge on the ad revenue for the Crowdstar titles. From June to December, we saw a significant uptick from about 10% of revenue from Covet Fashion, peaking at about 20% in the month of December, as they really rolled out rewarded video across that game. Design Home is obviously focused on things like getting a deeper meta, the e-commerce with our partnership with Cocone -- sorry, not e-commerce. With Roomage from Cocone in Japan, as well as the e-commerce with the partner we have yet to announce. So, ads on Design Home will lag and they're currently sitting at about 10% today. So, I think Design Home is where Covet was last year and they'll be rolling out more ads over time. But Covet has done a really good job at fully penetrating the ad revenue for that title.

Jeff Cohen -- Stephens Inc. -- Analyst

Great. Thank you, guys.

Nick Earl -- President and Chief Executive Officer

All right. Thanks, Jeff.

Operator

And our next question comes from the line of Doug Creutz of Cowen and Company. Your line is now open.

Douglas Creutz -- Cowen and Company -- Analyst

Hey, thanks. You mentioned that your three games in 2020 are owned IPs and you've singled out Deer Hunter. I'm just wondering from the other two, I know you're not gonna say what they are, but could you at least say are those new IPs or based on existing IPs? Thanks.

Nick Earl -- President and Chief Executive Officer

Yeah. Hey, Doug. We haven't said anything about them other than they're original IP. And I think what I would say now is that they are not existing properties the way that we really -- I mean, we've got this theme here of looking at some things in our catalog and bringing them back to life with all of the learnings we've made over the last couple of years, all the learnings we've had. For example, Diner DASH Town off the DASH franchise and, obviously, Deer Hunter next. The two that are unannounced are original IPs in the pure sense. So they're not based on anything old. That doesn't rule out the opportunity or the option to delve back into the catalog at a later date or even for next year but the two that we're referring to are truly pure new IPs.

Douglas Creutz -- Cowen and Company -- Analyst

Okay. Great. Thank you.

Nick Earl -- President and Chief Executive Officer

Thanks, Doug.

Operator

And our next question comes from the line of Drew Crum from Stifel. Your line is now open.

Andrew Crum -- Stifel, Nicolaus & Co. -- Analyst

Okay. Thanks. Hey, guys. Good afternoon. Just about the increase that you're forecasting for UA spend in '19. It looks like it's about 8%. I just would have thought that might be a little bit higher given your plans to launch three new titles this year. Can you just talk about what's behind that increase? And then I have a follow-up.

Eric Ludwig -- Chief Operating Officer and Chief Financial Officer

Yeah. Doug, this is Eric. I'm sorry, Drew. As you know, as I mentioned last quarter, we will have three launches this year and we focus all of our UA spend on kind of high-positive ROI post-launch. We will have, I call it, one to two weeks of launch window of what we spend non-ROI based, escape velocity spending. This is really getting the title out into orbit, so to speak. But after that two-week period when Apple and Google finish any featuring, at that point, everything is ROI driven and ROI based. And we've really looked back at what we've been spending historically for all of our titles and what we were expecting to spend for these titles that we're launching this year.

And a combination of Disney, having a broad co-marketing program with Disney, as well as the Disney brand, we expect there to be some great organic downloads for that title. Diner DASH Town has a very, very broad background of users, having been around for ten years as a brand. And then, lastly, WWE. So, we think we're bringing to bear brands that have built-in audience and that's gonna allow us to spend a little bit less on our post-escape velocity spending windows than we did two years ago when Design Home was at a certain high level of spend and even this past year.

Andrew Crum -- Stifel, Nicolaus & Co. -- Analyst

Got it. Okay. And then just a point of clarification on the first quarter bookings guidance. I know you guys said previously you expected it to decline sequentially but the slowdown year-on-year looks like it's about 2% to 4% growth year-on-year. Can you just address that in more detail? I know Tap Sports Baseball is seasonal but is there anything else behind that number?

Eric Ludwig -- Chief Operating Officer and Chief Financial Officer

Yeah. No. I mean, I think the biggest bulk of the decline is really Baseball. I mean, Baseball did $17.2 million in Q4. The other growth games actually grew sequentially and year-over-year. But Baseball will decline another $7 million to $10 million from Q4 into Q1. So, all of that decline plus is baseball and the bulk of the balance is growing Design Home and Covet Fashion. But it's not offsetting the declines of Baseball.

Andrew Crum -- Stifel, Nicolaus & Co. -- Analyst

Okay. Got it. Okay. Thanks, guys.

Nick Earl -- President and Chief Executive Officer

Thanks, Drew.

Operator

And our next question comes from the line of Mike Hickey of The Benchmark Company. Your line is now open.

Mike Hickey -- The Benchmark Company -- Analyst

Hey, Nick, Eric. Congrats on the strong quarter, guys.

Nick Earl -- President and Chief Executive Officer

Thank you.

Mike Hickey -- The Benchmark Company -- Analyst

Thanks for taking my questions. Just curious, you've given us sort of some framework on the contribution from WWE and Diner DASH but you're hesitant, it looks like, on Disney Pixar. Obviously, I think people are looking for some bigger numbers there and I think you noted that you delayed the beta a couple weeks. Just curious if you could sort of dive into the delay of beta and maybe any framework in terms of contribution or perhaps why you're not comfortable giving us some guidance there.

Nick Earl -- President and Chief Executive Officer

Yeah. In fact, the contribution that we're guiding is zero right now and that's because we're really trying to be disciplined about taking a scientific approach to how we give guidance and having that guidance be based on beta data. As we talked about this game, as you so rightly point out, last quarter, we actually did expect that the game would be in beta, that we would be giving you guidance. And if we had got it into beta before this call and had a couple weeks to really look at the data, we absolutely would be including it in the $440 million guidance we're giving for this year. We just decided that we wanted to spend a couple extra weeks making sure that we had a few more features in there to ensure that it was fully feature-rich and a complete experience.

So, what we decided to do was move that beta out into late Q1 and while that would not give us data for this call, it just would give us a stronger beta data set that we could work off. So, in other words, we will be giving you lots of guidance and thoughts and those thoughts will come from our beta results and we'll be doing that next call. So, we're sorry that we're not able to get it this earnings call. We just felt the right thing to do was to make sure that we had all the features that we wanted in there for beta.

Eric Ludwig -- Chief Operating Officer and Chief Financial Officer

Yeah. And the two things I'd add to that is this extra time horizon for beta is not an elongation of the original launch window. We still believe our original launch window, which Nick said was early Q3, that was what it was a quarter ago, that's what it remains today. That is not being changed at all. Secondly, we're really pleased with what we've seen in the private internal testing, as well as third party user testing as well as Disney team testing as well. We're very, very pleased with where that game is coming out right now. But we want to use real data and real numbers to set our guidance and just thought it would be premature to talk about numbers. But we absolutely will be updating guidance in May for this title. And once it's live in beta, folks will be able to pick it up and play and see the reviews and the numbers, etc.

Mike Hickey -- The Benchmark Company -- Analyst

Okay. Good. That's helpful. Thanks you, guys. I guess I'm just curious on your Crowdstar team. Obviously, they had Design Home and Covet Fashion. Are they working on any new games or do they have any pipeline, call it, outside of the work they're doing on the existing live services?

Nick Earl -- President and Chief Executive Officer

Yeah. So, that's unannounced and we've not talked about that at all. What I would say is that the studio is always kind of looking for new additions to both Covet Fashion and Design Home, as well as things that could be its own title, its own game. So, there's small efforts under way always to be looking at what else we can do in the broad space of these lifestyle apps/games. And that could turn into a game one day or it may be part of one of the existing franchises. So, I'll leave it at that. But I can tell you that we've got a very busy studio and they're always looking for interesting things to add in.

Mike Hickey -- The Benchmark Company -- Analyst

Okay. Cool. That's it for me, guys. Congrats and good luck.

Nick Earl -- President and Chief Executive Officer

Thanks, Mike.

Eric Ludwig -- Chief Operating Officer and Chief Financial Officer

Thanks, Mike.

Operator

And our next question comes from the line of Darren Aftahi of Roth Capital Partners. Your line is now open.

Darren Aftahi -- Roth Capital Partners -- Analyst

Hey, guys. Good afternoon. Thanks for taking my question. Two, if I may. First, Nick, can you give kind of updated thoughts on where the meta game updates are with Design Home? I know you said late 2Q but just kind of how you're feeling about that. And then the second question, kind of going back to one of the caller's early ones, I think if I look back, Tap Sports Baseball has just been stronger in general this year than it was last year. It only declined $3 million in bookings sequentially in the first quarter last year. So, just maybe reiterating, is there anything else besides Tap Sports Baseball in terms of the sequential declines from 4Q to 1Q? Thanks.

Nick Earl -- President and Chief Executive Officer

Hey, Darren. I'll take the first one and then I'll let Eric take that second one. So, yeah, Design Home meta, as you know, has been in development for most of the last year. We now have it in limited beta. So, it is out there. It is really being tested. The early results were great. We're very happy with them. Like anything new, especially to a complex experience like Design Home, it just takes a lot of massaging and balancing to get it right. And as we've talked about a lot, we're very, very acutely careful about making sure that the addition of something like this doesn't do anything to the core loop that we've got and to the core experience. That's why we're just being so methodical and so careful about how we integrate it in and that's why we test. But the results were really good. We're really happy with what we're seeing so far, really impressed with what the team's doing, and that will roll into the game by the end of Q2. So, we'll start to see results and we will be looking forward to talking about them.

Eric Ludwig -- Chief Operating Officer and Chief Financial Officer

Yeah. And, Darren, I've got really no more additional color commentary. Baseball did decline last Q4 to last Q1 and that, as I said in the prepared remarks and the last question, all of our decline from the $98 million and change in Q4 to our $89 million at the midpoint for Q1 is coming from Baseball. And we've got slight growth on the other growth titles but it's all Baseball as a decline. But just coming off a bigger number. You've got to remember, Baseball was more resilient Q2 to Q3 of this year. It actually grew, whereas last year it declined. And it declined less in Q4 than it did in Q1. So, we're just forecasting a harsher decline in Q1, given that we kind of pulled forward monetization into Q3 and Q4 this year. And I mentioned that in my prepared remarks last quarter as well, about the resiliency of this title. So, that's really the explanation there.

Darren Aftahi -- Roth Capital Partners -- Analyst

If I can squeeze in one more, so the $20 million you've kind of handicapped in bookings for the two new games, I guess how would you kind of characterize the risk profile of those bookings? And these are kind of the two significant first games you guys have launched under Nick being CEO, save for some other stuff that was legacy, so I'm just kind of curious, is there any risk to this stuff being potentially pushed out or is it pretty ironclad that you're gonna get this out in that window timeframe?

Nick Earl -- President and Chief Executive Officer

Yeah. I mean, look, in this business, there's risk with everything, as you well know. That said, we feel good about the timing of these new games. We feel good about the guidance we're giving. We're looking at the beta results and the changes that are being made in the beta time. The team is on top of both of them and I'd say our confidence is very high in what we're talking about. And we'll obviously know a lot more as they roll out to a larger scale and as we get to Canada and then, obviously, worldwide.

Eric Ludwig -- Chief Operating Officer and Chief Financial Officer

Yeah. And, Darren, just to mention that just this afternoon, Diner DASH Town went into beta in two new countries: New Zealand and Singapore. And it's been sitting in the Philippines and Nick talked about this in his prepared remarks that we've been very happy with what we've seen there in the Philippines. We felt it was now time to get it to some new countries and you'll see that flowing through. And then another version, iteration of the WWE will be also going live later this month. And as Nick mentioned, we're pleased with what we're seeing in both private beta as well as the roll outs of those titles. So, feel good with where we are on the guidance and the timing.

Nick Earl -- President and Chief Executive Officer

Yeah. And one thing I'd add, Darren, is that, by definition, we won't launch something unless we believe it's gonna be a growth game. So, that doesn't necessarily mean that this is a $100 million or $500 million out of the gate. This means that it's gonna grow year-over-year and we really look very closely at how it's performing in beta and we look at engagement and retention, the early, mid, and later retention, as much as we have, at least, and monetization and assess whether we believe this will grow year-over-year. And we just won't launch a game unless we believe that's gonna happen. So, from that perspective, we're also confident.

Darren Aftahi -- Roth Capital Partners -- Analyst

Great. That's helpful. Thanks, guys.

Nick Earl -- President and Chief Executive Officer

All right. Thanks, Darren.

Operator

And our last question comes from the line of Mike Olson of Piper Jaffray. Your line is now open.

Michael Olson -- Piper Jaffray -- Analyst

Hey, good afternoon. You mentioned the new Deer Hunter title is gonna be developed by some talent from the Tap Sports Baseball group. Is that a pretty typical practice for you guys to take development teams from other titles and then kind of retool them onto new, different titles? I guess, in this case, for example, are the mechanics similar enough between the games or does that not even really matter? Or I guess just curious how you think about shifting those resources around from one game to another.

Nick Earl -- President and Chief Executive Officer

Yeah, that's a really good question. And by design, we went to this studio and asked them if they'd like to do Deer Hunter. But we had a good sense that Deer Hunter was ready to have a next-generation version done and in our world, in our kind of studio collection, the Tap Sports Baseball studio, we call it Glu Sports, is absolutely the right studio to be working on that. It is normal practice to have teams kind of split and start something new. It keeps things fresh, interesting, and creative for the talent in the studio. More importantly, they get to learn from their previous work and build on top of it. And this studio has been so incredibly successful for us with the growth of Tap Sports Baseball, we feel like both WWE and Deer Hunter Next are just perfectly situated there.

The design of the game, what we're so excited about with Deer Hunter and the reason why we wanted to talk about it on this call, it's really the synthesis of a core mechanic that has done extremely well over the many years it's been out in various forms and the download potential that this game has. We've seen just an unbelievable amount of downloads. As I mentioned, a quarter billion since 2012. You take those two and you combine it with the Glu Sports' ability to create a very, very deep meta game, and we believe those three components together is a recipe for a real potential hit if we pull this off.

Furthermore, it's our IP so it's margin rich and what we like to call high-calorie dollars. So, from that perspective, we think there's a great business opportunity. But more importantly, we just think this is a potential great experience for the millions of people who love to play hunting games, regardless of whether they're really into hunting or not.

Michael Olson -- Piper Jaffray -- Analyst

Okay. Makes sense. And then as you mentioned, you anticipate having a sizable cash balance by the end of the year. Just wondering what you're thinking on the M&A front. And maybe another way to ask it is where does M&A fall in your various areas of focus compared to kind of just keeping your heads down and continuing to focus on organic growth of current and future titles? Thanks.

Nick Earl -- President and Chief Executive Officer

Yeah, great. So, yeah, nothing has changed there. I mean, we're always looking at the market and we've got a strong core dev group here that's doing all sorts of slicing and dicing of data and numbers and making sure we're not gonna miss anything that would be a good fit. But our strategy remains to be focused on internally generated games. As you guys all know, we are working very hard to deliver a game from soup to nuts that was built here under this exact team's leadership and we're highly focused on that. We're very confident that we're gonna be able to do that and that is definitely the focus for Glu for the time being.

We are also looking at M&A but I really view acquisitions as a "nice to have," not a "must have." And when and if we find something that is a good cultural fit, that is a good logistical fit, a good financial fit, but mostly a good cultural fit, we'll certainly looking at pulling the trigger and bringing them into the mix. But, yeah, nothing's really changed from where we were last year and I like the fact that we are just very, very focused on delivering internally generated games and not wavering from that strategy for the time being.

Michael Olson -- Piper Jaffray -- Analyst

Great. Thank you.

Nick Earl -- President and Chief Executive Officer

All right. Thanks, Mike.

Operator

And I'm not showing any further questions at this time. I would now like to turn the call back to Nick Earl for closing remarks.

Nick Earl -- President and Chief Executive Officer

Great. All right. Thank you very much for joining, everyone, today and we look very much forward to our call next quarter. Thank you.

Operator

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Everyone, have a wonderful day.

Duration: 43 minutes

Call participants:

Harman Singh -- Vice President of Finance and Investor Relations

Nick Earl -- President and Chief Executive Officer

Eric Ludwig -- Chief Operating Officer and Chief Financial Officer

Jeff Cohen -- Stephens Inc. -- Analyst

Douglas Creutz -- Cowen and Company -- Analyst

Andrew Crum -- Stifel, Nicolaus & Co. -- Analyst

Mike Hickey -- The Benchmark Company -- Analyst

Darren Aftahi -- Roth Capital Partners -- Analyst

Michael Olson -- Piper Jaffray -- Analyst

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