Home PC News Glu reloads its war chest for mobile game acquisitions

Glu reloads its war chest for mobile game acquisitions

Glu Mobile has grown into an enormous cellular gaming writer by way of each acquisitions and home-grown titles. But because the world adjustments across the firm, Glu is altering with the occasions.

Back in June, the San Francisco-based firm raised $151.eight million in a secondary public providing. That gave it a struggle chest to pursue new acquisitions. Making good use of that cash would be the job of Chris Akhavan, a Glu SVP.

Other rivals similar to Scopely have been busy shopping for different corporations. In truth, within the second quarter, the worth of recreation acquisitions and investments topped $7.eight billion, based on knowledge collected by recreation funding specialist Sergei Evdokimov. During the quarter, Zynga purchased Peak Games for $1.85 billion.

But Glu additionally has its personal studios engaged on titles similar to MLB Tap Sports Baseball, Deer Hunter, Covet Fashion, Design Home, and others. It lately printed Disney Sorcerer’s Arena, and extra video games are coming. I talked to Akhavan concerning the general technique.

Here’s an edited transcript of our interview.

Above: Glu Mobile’s Chris Akhavan.

Image Credit: Glu

Chris Akhavan: We issued a secondary, and the overall quantity was $151.eight million, again in June. That was a terrific milestone for the corporate. An enormous a part of that was to present us the pliability to pursue M&A, one thing that we’ve kicked off the 12 months with a larger deal with. People don’t notice that Glu has been constructed on — lots of our profitable titles and studios that we now have in the present day, at one level they originated by way of an acquisition.

Going again to 2011, we acquired Blammo Games. They went on to create the Kim Kardashian recreation. In 2012 we acquired the Deer Hunter IP from Atari and went on to have a really profitable franchise with that IP. We have the following model of Deer Hunter at present in improvement. In 2013 we acquired a small studio that’s now grow to be our sports activities studio, with the MLB Tap Sports Baseball franchise, considered one of our high video games. In 2014 we acquired PlayFirst, which made the Diner Dash franchise. Tom Hall was a part of that. And then clearly in 2016 we had the CrowdStar acquisition, which introduced us an exceptional studio with Covet Fashion and Design Home.

If you have a look at the corporate in the present day, it’s composed of lots of nice groups and IP that initially got here to the corporate by way of an acquisition. We set out this 12 months pondering that the corporate was in a great place foundationally. The firm had restructured over various years to deal with what we name “growth games,” video games we function over the course of a protracted time period. We felt like we’re now in a great place the place we will carry on one other nice studio and crew into the image and help their development. The capital increase was to present us the pliability to pursue acquisitions if we discover a good match.

Disney Sorcerer's Apprentice has debuted on iOS and Android.

Above: Disney Sorcerer’s Apprentice has debuted on iOS and Android.

Image Credit: Glu

GamesBeat: With that quantity of capital, are you seeking to catch studios in a sure stage of their development, earlier than they’ve hit the large time?

Akhavan: We look throughout the spectrum. If you have a look at our prior offers, just like the crew that finally grew to become our Tap Sports Baseball studio, that was an acqui-hire. At the time, after we met them, it was a three-person crew that was keen about making cellular sports activities video games. They had a cool prototype of a soccer recreation that was very cellular pleasant, social, and straightforward to play. We noticed a terrific crew we may construct with, so we introduced them on board and gave them the sources to construct out a full studio, and likewise assist them get licenses with MLB and the MLBPA. Over the years that franchise has grown phenomenally. Through the tip of Q1 that studio has accomplished $278 million in bookings as a part of Glu. That originated from a small three-person acqui-hire.

On the opposite finish of the spectrum, CrowdStar was a extra mature studio after we acquired them. They had Covet Fashion stay and operating for a number of years on the time. They had Design Home in beta. That was a extra mature studio that had a terrific stay title and an impending launch. Glu was in a position to assist spend money on the studio and develop that studio by way of scaling up the crew even additional, investing closely in person acquisition, and the whole lot else that’s fueled the expansion of the studio.

We’re open to the total spectrum, from earlier stage alternatives the place we see a great DNA match that we might help speed up, by way of to mature and even doubtlessly extra mature than we’ve accomplished prior to now. The funding we raised was extra to present us the pliability to pursue something inside the vary I talked about. If we do discover a good match, we’re able to go from a funding perspective to have the ability to pursue an acquisition.

GamesBeat: How did your position change right here, your obligations?

Akhavan: I’ve at all times been concerned in corp dev throughout my seven-plus years at Glu. I’ve labored on our prior offers. But I additionally used to supervise different components of the enterprise, together with issues like advertising and UA. At the start of this 12 months, I handed that off to focus extra on corp dev. My position now could be very corp dev-heavy, however I additionally nonetheless deal with biz dev and our promoting income enterprise, which continues to be a significant enterprise for us. My position change was actually letting go of a number of the prior components of the enterprise to focus extra on corp dev and our pursuits in that space.

GamesBeat: How does the sport business search for this type of alternative now, the M&A chance?

Akhavan: We’ve seen continued consolidation. Our friends at corporations like Scopely and Zynga and Stillfront have all been energetic. We assume there are nonetheless lots of alternatives on the market, and we predict that consolidation development is more likely to proceed. As the cellular gaming ecosystem evolves, issues grow to be extra aggressive, and scale turns into an growing benefit. We’re seeing lots of studios that may be doing effectively in the present day — they’re beginning to see the good thing about turning into part of a bigger participant, the place they’ll faucet into shared infrastructure, and even simply the capital to gasoline funding in issues like UA. It can provide studios extra alternatives to deal with making and working superb video games, whereas they let the guardian firm assist them with lots of that central infrastructure and help, so that they don’t must reinvent the wheel on lots of these constructing blocks which might be extra scalable.

GamesBeat: That technique has nearly grow to be a necessity. If everybody else is doing this out there, then it’s a forcing perform. You must eat or be eaten.

Akhavan: The market is certainly requiring one other tier of functionality to achieve success in the present day. You must be nice in so many areas, from analytics to UA to, in lots of instances, advert monetization. Product advertising, PR. When you begin to add it up, it turns into a large effort for even a 50-person or 100-person studio, to construct a terrific recreation and likewise be nice in any respect of these further features. Whereas plugging into an even bigger writer like Glu, you get entry to phenomenal expertise that may help you in these areas and permit that core studio to deal with making nice merchandise, which is finally what studios need to focus their power on.

GamesBeat: How do you have a look at the important thing benefits of Glu? What do you see as one thing that helps Glu on this technique?

Akhavan: We’re robust in UA and advertising, for positive. That’s a core power. But what’s distinctive about Glu is our deal with development video games. We’re not a high-volume enterprise the place we’re cranking out title after title. We’re very selective in investing in titles that we predict have that very lengthy development potential. “Products that can last for decades” is what we at all times attempt to create and nurture. Our benefit is having expertise in constructing these development video games and accelerating them and displaying that observe report of 12 months after 12 months of enchancment and development, going deeper on these properties. Whether it’s Design Home or Tap Sports Baseball, we’re at all times discovering methods to evolve these experiences and ship extra to the viewers, in addition to discovering revolutionary methods to faucet into new audiences.

When we method a studio, that’s one thing they discover enticing about Glu. When we place a wager on a title or franchise, they know that we’re going to take it severely and make investments deeply, versus different publishers that may dabble in putting many alternative bets to see which of them work out. We’re extra intentional in the place we apply our sources and focus. Where we see that potential, we lean in very closely, and throughout the spectrum — advertising, UA, and the whole lot else by way of supporting the studio. For instance, issues like person analysis groups that may help them in understanding their viewers at a deeper degree. That’s necessary while you’re making an attempt to create that multi-year relationship together with your gamers.

Above: Covet Fashion has launched greater than 50 totally different feminine physique varieties.

Image Credit: CrowdStar/Glu

GamesBeat: The instance you introduced up of the small sports activities crew rising up and being matched with a license, that’s a transparent strategy to unlock the worth of that crew.

Akhavan: It was related with our Toronto studio, the one which was acquired in 2011. They had initially created a recreation known as Stardom Hollywood once they joined Glu. Later on, Glu helped them get the partnership with Kim Kardashian, which clearly led to phenomenal success. It’s one other instance the place our experience in working with IP was one thing we had been in a position to carry to the desk to assist a studio succeed.

GamesBeat: What do you concentrate on the potential of cellular video games? I spend lots of time throughout the entire spectrum, and I lately spent lots of time with The Last of Us Part II. It’s a really attention-grabbing, very satisfying factor to play and write about. I ponder if cellular video games can or ought to have the identical sort of ambitions as triple-A video games. And if not, what’s the alternative, the factor that may very well be pushed for?

Akhavan: There are undoubtedly alternatives for cellular video games to broaden past what individuals traditionally affiliate with them. It may look totally different in comparison with what you may anticipate from a triple-A PC or console expertise. Maybe that’s not precisely what you get on cellular. But as a common theme, providing avid gamers and customers a lot deeper, extra significant experiences is one thing that I see growing and evolving in cellular.

Design Home and Covet Fashion are good examples for us, the place these are — you would name them video games, however they’re actually past only a recreation. They’re including worth to the lives of those who work together with these merchandise, giving them an outlet for creativity, an outlet to study extra about design or trend that impacts their actual lives. Ultimately it provides them a connection to different those who have shared pursuits, the place they’ll collaborate and bounce concepts off one another. Through that I feel you’re seeing a lot deeper connections and experiences growing by way of cellular video games.

Certainly there’s a chance, although — a recreation like Last of Us is a good instance of compelling narrative and depth of character improvement. We haven’t seen lots of that but in cellular, nevertheless it’s not one thing that may’t be viable on the platform. You simply must rethink the way you ship it in a approach that is sensible on a small telephone versus a PC monitor.

GamesBeat: Games for various audiences appears to be an space the place you’ve excelled. That’s one other extra fertile route, possibly.

Akhavan: Those merchandise serve an underserved market. Largely girls make up the viewers for each of these titles. Traditionally the cellular recreation business simply says, “Well, we’ll make another farming game, or a match-three game.” Instead, these merchandise supply significant connections to the true lives of the those who work together with them. Beyond that, they offer a real inventive outlet, the place they’ll categorical and develop their creativity. They function in areas that weren’t overly saturated, and the place there was this large demand from customers to have a distinct sort of interactive leisure expertise that simply wasn’t being provided beforehand.

GamesBeat: As far because the footprint you could have, how a lot curiosity is there in worldwide markets, like China? Because of the place we’re with COVID, is there any specific geographic curiosity in the place you need to broaden?

Akhavan: Glu is fairly closely concentrated in North America. We’ve talked prior to now about how we now have a need to broaden internationally. In specific we’ve been centered on growth efforts in Europe. It’s one thing we’re searching for. Should any acquisition match with a chance to broaden internationally, that might be a plus.

Touching on what you hinted at with COVID, one of many challenges lots of people are going through in corp dev, clearly you’ll be able to now not journey to studio and do what you sometimes do, have these multi-day visits the place you spend all day on web site assembly individuals and getting a really feel for the tradition. Those dinners you could have after a protracted day collectively, the place you get extra of that non-public connection, that’s difficult to do now after we’re on video calls all day.

Fortunately lots of the relationships we had previous to this all occurring, so we will construct on these. We’re not letting the present state of affairs gradual us down. We’re engaged on video and doing what we will to keep up the identical capacity to construct these relationships on this new setting all of us must work with. But we’re open to a broad vary of geographies within the studios that we speak to.

Above: Glu Mobile’s Design Home.

Image Credit: Glu Mobile

GamesBeat: Looking on the alternative that you simply discovered to lift cash this 12 months through the pandemic, video games appear higher off than many different industries proper now.

Akhavan: The recreation business has been lucky. People have turned to gaming extra broadly on this time, the place different types of leisure aren’t accessible. My private viewpoint is it’s additionally introducing lots of people that weren’t engaged with video games into the gaming world. For the entire business, we’re going to see this as one thing that drove an acceleration, extra individuals turning into avid gamers and discovering that video games should not simply easy leisure anymore. You can discover significant friendships and create significant relationships by way of video games.

I at all times inform my spouse — I’m an enormous PC gamer myself, however for me it’s how I’m going and hang around with my buddies. We’re on Discord voice chat with one another whereas we play a recreation like Valorant or Counter-Strike. This second, for lots of people, has launched them to the truth that whereas we will’t join with one another in individual, video games present an outlet to keep up relationships and create new relationships. That’s been one of many positives, if there’s one, to come back out of the troublesome state of affairs we’re going by way of this 12 months.

GamesBeat: What are you fascinated with so far as transferring ahead together with your workforce throughout this time? We have the pandemic, we now have Black Lives Matter, we now have sexual harassment crises. All this stuff are weighing very closely on the workforce.

Akhavan: Personally I’ve been impressed by how Glu has responded to what’s occurred with the Black Lives Matter motion specifically. We’ve addressed that in an enormous approach internally. We’re having lots of conversations right here, and we’ve rolled out coaching packages for all of our workers on unconscious bias, allyship, energy and privilege. This morning I used to be engaged on unconscious bias coaching. It’s good to see that Glu is stepping up inside our group and dealing on to help the trigger. In addition, we’ve made a donation to the NAACP and the Equal Justice Initiative. I’ve seen related from lots of different gaming corporations. I’ve been impressed to see the business step up and play an necessary position there.

In phrases of the working from dwelling setting that we’re coping with, Glu has been listening carefully to our expertise and understanding what’s working, what’s not working. People have combined challenges. Everyone could be very productive from dwelling, so it’s been a terrific second the place we as a company have realized that individuals might be extremely productive on this distant format. But that comes with some challenges. There’s been burnout in being on Zoom video all day, not having that real-life private connection. Not everybody has a pleasant devoted workplace house at dwelling. Maybe they don’t have the best gear they want. They must take care of these challenges.

We’re working with our expertise within the brief time period to make this as comfy as doable, together with giving necessary firm days off. People aren’t taking holidays now, and we need to be sure that they’re taking time to relaxation. It’s laborious to do this when everybody’s plugged into their computer systems, so we now have full firm shutdown days we add on high of regular holidays.

Beyond that, in the long run we’re how you can evolve, doubtlessly, the work construction between working at dwelling and being in an workplace. We’re seeing large advantages to working at dwelling. The future of labor, even effectively past COVID, may very well be very totally different than it was pre-COVID. We may have a world the place individuals work from their properties a part of the week, after which come to the workplace for a few days every week with extra of an intention to spend that point assembly with different individuals. You may see extra of this hybrid workplace and residential mannequin being extra prevalent popping out of the pandemic.

Above: Chris Akhavan (left) and Nick Earl (CEO of Glu) stand on the entrance to Glu’s new headquarters.

Image Credit: Dean Takahashi

GamesBeat: One factor I’ve been fascinated with a bit is tales that must do with the evolution of the sport business. I have a look at one thing like EA in 2008, once they had 60 video games in improvement, and now they launch possibly six or eight video games a 12 months, however the income and revenue are far larger than they was once.

Akhavan: We have a miniature model of that. Back after I joined in early 2013, the corporate was cranking out video games on a regular basis. I really feel just like the month I joined, that month alone, the corporate put out three video games. It was a really totally different mannequin. There had been lots of sequels, Frontline Commando 2 and so forth. That rinse and repeat cycle — put out a recreation, monetize it for six to 9 months, after which you could have the following recreation popping out. Certainly we’ve additionally made that evolution towards the expansion recreation philosophy of investing in fewer properties, however in a way more significant, long-term approach.

GamesBeat: I ponder about adjustments in the entire business, just like the rise of hypercasual video games. How may that have an effect on Glu?

Akhavan: Hypercasual has been attention-grabbing. We’ve clearly been maintaining a tally of that market, given how important a share of downloads have gone towards hypercasual video games. It’s a internet optimistic for the entire market, as a result of hypercasual is a good way to introduce individuals that aren’t even informal avid gamers — possibly you get them into these snack-sized 20-second session video games, after which that’s a pathway for them to get into extra significant and long-term engagement video games.

We know that’s occurring, as a result of when you play these hypercasual video games — play a degree, die in 10 seconds — the adverts you sometimes get are for extra long-term stay ops-oriented, free-to-play video games which might be designed for longer classes. We’re seeing hypercasual as this attention-grabbing funnel that possibly brings in a really informal shopper, will get them accustomed to video games, after which doubtlessly, by way of the adverts they see in these hypercasual video games, they finally transfer into deeper gaming experiences.

GamesBeat: On the M&A aspect, how a lot may you think about that market?

Akhavan: We’re style agnostic typically relating to M&A, however when you have a look at our prior observe report, we do lots of evaluation to know the place the alternatives are out there. I talked concerning the sports activities studio. Back then we noticed an enormous alternative for cellular free-to-play sports activities that was huge open. Baseball specifically didn’t have a top-grossing recreation. That was one the place we thought there was an enormous alternative to speculate. We additionally talked about Design Home and Covet Fashion as being merchandise that had been sitting in their very own classes.

What I’ll say about that, we’re style agnostic. We’re keen to take a look at studios throughout all kinds of genres. But we finally need to spend money on alternatives the place we predict there’s a differentiated market to go after, or a considerably rising market the place we will seize a significant share. We are likely to shrink back from hyper-competitive, hyper-saturated markets, just like the social on line casino market. That’s one we’ve traditionally averted, the place you could have these huge gamers in a hyper-competitive state of affairs.

GamesBeat: How do you have a look at a few of these long-time franchises, like Diner Dash? How usually do you could refresh that or change its route or in any other case preserve it producing income?

Akhavan: I need to say that PlayFirst began within the early 2000s on PC. We acquired the studio in 2014. Since becoming a member of Glu, they’ve launched a complete of 4 variations of Diner Dash. The first was the preliminary Diner Dash once they joined, which was the primary smartphone, actually free-to-play Diner Dash. They took the learnings from that and launched Cooking Dash, which was very profitable, together with the Gordon Ramsay Restaurant Dash recreation. Then Diner Dash Adventures is the newest installment in that franchise, launching final 12 months. While there’s been new SKUs launched in that franchise, it’s actually been an evolution of the franchise itself, that crew studying what their viewers is searching for and refining their method. It’s been a multi-year funding within the Dash franchise.

GamesBeat: What do you think about to be a number of the greatest areas of funding for you internally proper now?

Akhavan: We’re very centered on our development video games. We’ll proceed to speculate closely in Design Home and Covet Fashion, in addition to our baseball title. In phrases of pipeline, we now have a brand new Deer Hunter in improvement, after which a few video games past that. We’re additionally persevering with to spend money on the Disney Sorcerer’s Arena recreation that we lately launched. The inside focus is continuous to refine and evolve experiences throughout these titles. We’re at all times seeking to up-level our central infrastructure and be capable of supply much more compelling device units over time to the studios we work with.

GamesBeat: How do you determine that you could let go of a recreation, give it a break, or in any other case really feel like you’ll be able to’t be probably the most aggressive in a specific house?

Akhavan: If I look again to the previous couple of years, there have been titles that we ended up strolling away from, or de-emphasizing. We had a WWE recreation that we created and launched, and it simply didn’t hit the mark. The KPIs weren’t the place we would have liked them to be. We gave it a great effort and tried to proceed to refine, and after some time of doing that we concluded that the hole we’d must fill to make {that a} viable enterprise in the long run was simply too nice. We redeployed that crew’s sources to different titles.

We attempt to be very data-driven, and likewise shopper insights-driven. Look on the knowledge and perceive it, but in addition layer on the extra subjective items that you would be able to get by way of shopper insights, get that holistic view of how customers are experiencing a recreation. Whenever we determine to not spend money on a product, it’s as a result of the alerts coming from throughout that spectrum of information and insights are telling us that we’re too far off the mark to create a long-term profitable development recreation.

GamesBeat: When it involves management from girls in recreation corporations, and Glu specifically, how are you fascinated with that, making that doable?

Akhavan: It’s been an enormous precedence for us, a part of our effort to enhance by way of variety and inclusion. We’ve added two girls to our board lately. We’ve taken direct motion there. It’s an space the place we have to proceed to handle and enhance variety throughout the spectrum of our expertise.

GamesBeat: How large do you assume cellular goes to get, and how briskly is it going to develop towards the sort of numbers individuals are speaking about? Newzoo was speaking about three billion avid gamers by 2024. How ought to we take into consideration that? How a lot do you assume corporations ought to attempt to develop because of this?

Akhavan: We’re clearly very bullish on the prospects for cellular in the long run. We’re nonetheless within the early days. Mobile video games are evolving shortly. There’s a lot room to enhance and develop extra significant experiences. When you have a look at issues we’ve talked about on this dialog, whether or not it’s hypercasual or video games like what CrowdStar delivered to market, video games that introduced in new audiences that weren’t beforehand avid gamers, that development will proceed. We’ll proceed to see attention-grabbing, compelling new experiences provided within the cellular gaming world that can carry within the subsequent wave of customers that don’t essentially work together with any video games in the present day. There’s lots of purpose to imagine that this market has loads of room left to develop.

GamesBeat: How do you’re employed with Nick Earl?

Akhavan: I work with him day-after-day. He’s massively supportive. He’s at all times keen to get entangled. We have conversations with the studios. He’s keen about our tradition and the way we function at Glu. He does a terrific job of strolling new groups by way of what that appears like, so that they know that in the event that they do grow to be part of Glu, they’re strolling right into a tradition that we’ve constructed with lots of care and intention. Nick has been crucial in that course of, being that voice for the corporate. He’s there on a regular basis to collaborate and bounce concepts off him. He’s at all times keen to straight interact with new groups.

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