Glu Mobile (NASDAQ:GLUU) has stars in its eyes again. The mobile gaming specialist that struck app store gold with Kim Kardashian last year and teamed up with Katy Perry after her status-affirming Super Bowl appearance earlier this year has brokered a similar deal with Britney Spears.
Glu and Spears have entered into an exclusive five-year agreement for the development of a new mobile game. The app will allow players to interact with Spears, simulating the highs and lows of the entertainment business.
The premise for a celebrity game might sound hokey, but it's hard to argue with Glu on that front. It crushed naysayers last summer as Kim Kardashian: Hollywood shot up the app download charts. The game's success took the market by surprise, and it proved to be a gradual taking. The stock posted four consecutive weeks of double-digit percentage gains last summer as the mobile diversion proved as sticky as Glu's moniker.
Mobile gamers are finicky, and anyone who invested in Zynga (NASDAQ:ZNGA) on the strength of FarmVille or King Entertainment (UNKNOWN:KING.DL) as Candy Crush Saga was peaking knows that stars fade faster on app store best-seller lists than they do in Tinseltown.
For example, Kim Kardashian: Hollywood delivered $43.4 million in revenue during Glu's third quarter last year, only to slide to $29.3 million during the holiday quarter and to $21.3 million in last week's first-quarter report.
Investors made Glu a big winner last week. The stock soared 27% to stand as the third-best-performing Nasdaq-listed company, fueled by strong growth in its latest quarter. The market applauded the 33% year-over-year pop in revenue, but the comparisons will get harder this summer when we're comparing Kardashians to Kardashians.
This is why these deals matter. Glu has extended its partnership with Kardashian. More games will be on the way. However, loading up its arsenal with proven celebrities and its now-proven role-playing mobile games will keep the hits coming.
Spears might seem like a celebrity who peaked several years ago, but that's not necessarily true. We live in the era of social media, and new social broadcasting platforms and popularity-gauging metrics will make it easy for Glu to team up with stars who can draw a crowd.
Glu's press release last week gushed about the impressive social audience Spears commands:
- 39.5 million likes on Facebook
- 41.6 million followers on Twitter
- 4.4 million fans on Instagram receiving every snapshot she uploads
- 2.7 million music fans have her singled out on music video site Vevo
Zynga and King need to keep reinventing themselves to stay on top, but Glu's model might be easier to duplicate. All of the ingredients are there, it just needs to sprinkle in a new celebrity every now and then to get things going. The success of Kim Kardashian: Hollywood probably played a major part in getting Perry and now Spears to team up with Glu, and this could be just the beginning for the mobile app star maker.
Perry's game is scheduled to hit the market during the second half of this year. Spears should follow early next year. If one or both are hits you can be sure that the line of singers, starlets, and reality show stars will grow even deeper at Glu.
Smartphone owners might tire quickly of mobile gaming sensations, but they're not afraid to channel Spears as they say "hit me baby one more time."
Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Apple, Facebook, and Twitter. The Motley Fool owns shares of Apple, Facebook, and Twitter. 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.