It's now rejected the method, but Glu made $2.9 million from incentivised downloads this quarter
The cost of playing nice with Apple
Want to know how important incentivised downloads were to iOS publishers before Apple threw its toys out of the pram in May?
Some detail on the practice, which rewards players who download promoted paid and free apps to gain in-game currency on their favourite titles, was provided during Glu Mobile's analysts day presentation.
Ironically, the numbers were only revealed because Glu has removed the per install model hosted by companies such as Tapjoy, Flurry and Adknowledge from its games because it expects Apple to officially clamp down on the process, although Apple (being Apple), no one really know what the official line is.
Bottomline of millions
Indeed, such is the confusion, Glu hadn't updated any of its games over the past month because Apple had rejected updates on some apps and games using the incentivised download model. Now having pulled this code, Glu has updated its games with new content.
Yet, when it comes to brass tacks, the reason so many companies - especially big publishers such as Glu - used and enabled CPI (as it's labelled) is because it's very lucrative.
Glu generated $2.9 million in CPI revenue in the two months of its current quarter, and $2.2 million in Q1 2011.
Computer says no
Yet, as a publicly owned company on the NASDAQ, Glu is sensitive to Apple's attitude to such business. For that reason, it's now decided to totally 'derisk' from CPI.
Happily for investors, although it's now predicting no ongoing revenue from such methods, it's upped its revenue and profit predictions for the next quarter, despite such promotions previously being around 20 percent of the company's revenue.
According to CEO Niccolo de Masi, "50-75 percent of CPI dollars can be replaced with other advertising mechanics in the short term."
"Over the medium term, we expect to do more through these methods as we accelerate updates to our social feature," he said.
Of course, Glu will continue to support CPI in platforms that enable the popular method for app discovery and promotion, such as Google's Android.
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