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Kim Kardashian: Hollywood adds $340 million to Glu Mobile's value

Kim Kardashian: Hollywood adds $340 million to Glu Mobile's value

A couple of weeks ago, I pointed out that the share price of both King and Glu Mobile was on the up- seemingly for no reason.

That certainly appears to have been the case for King (NYSE: KING), which at one point looked as if it was going to finally reach its IPO launch price of $22.50.

It didn’t.

In the case of Glu (NASDAQ: GLUU) , however, as was pointed out in the article's comments section, its share price started to rise around the same time that the company released Kim Kardashian: Hollywood.

Bling, bling

Given the Glu has built its reputation on high-end 3D action games like the Deer Hunter franchise - previously its most successful brand - the release of its Kim Kardashian game had somewhat slipped under my radar.

After all, Gameloft’s Paris Hilton mobile game (albeit a Java game released in 2006) had hardly been a success, had it?

But, no. For whatever reason - and everyone is currently considering the tea leaves on this one - Kim Kardashian: Hollywood has been a massive success and looks like it will continue to be so for months to come.

Glu's share price rise since it released Kim Kardashian: Hollywood in late June

Indeed, after less than a month, analysts already reckon the game will generate over $225 million in Glu’s current financial year (i.e. six months), making it the company’s most successful game ever.

And - and this is somewhat ironic - making the 3D all-action game publisher profitable for the first time in the smartphone era.

In FY2013, Glu Mobile’s annual revenue was a mere $106 million and it made a loss of $20.1 million.

On the up

Unsurprisingly, the expectation of this sort of turnaround has had a massive impact on Glu’s share price.

Since the game was released, Glu’s shares are up 98 percent, generating an increase of around $340 million in the company’s market capitalisation.

Indeed, Glu’s share price hasn’t been this high since late 2007.

Of course, it may not last. At some point, some investors will want to sell (some or all of) their shares and take their profits.

Equally, while the game has been successful in the US and some key European markets, it’s not yet demonstrated overwhelming global success a la Candy Crush Saga. For example, it’s only been the #1 top grossing iPhone game in 16 countries.

Yet, whatever happens, it has vaulted Glu Mobile into the higher echelons of F2P hit game publishers, demonstrating once again that in the app ecosystem - as in the game of Hollywood celebrity - you only need one lucky break to go from a struggling wannabe to a celebrated success story.

Contributing Editor

A Pocket Gamer co-founder, Jon is Contributing Editor at PG.biz which means he acts like a slightly confused uncle who's forgotten where he's left his glasses. As well as letters and cameras, he likes imaginary numbers and legumes.

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