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Despite Kim Kardashian: Hollywood generating $43 million, Glu's shares drop 20%

Will Next Celeb sequel spark the bulls?

Despite Kim Kardashian: Hollywood generating $43 million, Glu's shares drop 20%

It's no surprise that Glu Mobile (NASDAQ:GLUU) has just posted record financial figures.

After all, everyone knows that its game Kim Kardashian: Hollywood is one of the smash hits of 2014, and this quarter - the three months ending 30 September 2014 - is the first full financial period in which the game's sales are publicly recorded.

For the record, across Android and iOS, the game was downloaded 23 million times, accounting for around 21 percent of Glu's total.

In terms of revenue, however, it accounted for $43.4 million of non-GAAP revenue.

That was 52 percent of Glu's total revenue in Q3, with the next biggest source of sales being Deer Hunter 2014 at a mere $9.9 million.

The X factor

Yet, demonstrating the difficulty of being a publicly-owned company, Glu's shares have taken a massive hit - down 20 percent - after it announced its record financials.

It seems the backdrop of Zynga and King's performance in the stock market, combined with exuberance from investors when the game's success was first released in July - then shared peaked at over $7 - means Glu's record success wasn't as big as expected.

Kim's real birthday was celebrated in-game with a party

In addition, investors are now looking to see whether the game is still growing in terms of users and payers. Once again, previous sharp declines from key F2P games such as FarmVille and Candy Crush Saga have spooked longterm sentiment when it comes to gaming stock.

Bizarrely, then, the result is that Glu's stock is now around the same price as before Kim Kardashian: Hollywood was released, and remember that's back when Glu was a loss-making company that had a history of surprise rights issues to fund acquisitions and sustain its longterm losses.

Glu shares were down 20% in a day

Still, the markets move in mysterious ways. Glu, for its part has announced an extension to its licensing agreement with Mrs Kardashian West for another three years.

What's next?

It's also cheekily listed the next game from its casual developer Blammo as being "Next Celeb".

Surely Mr Kardashian West's game is only a matter of time - that would be the ultimate Mr & Mrs status symbol.

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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