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Niccolo de Masi on making Glu Mobile the Zygna of mobile gaming

The freemium business is the audience business
Niccolo de Masi on making Glu Mobile the Zygna of mobile gaming

The third largest Western mobile games publisher, Glu Mobile is undergoing a significant transformation.

It's turning its back on its traditional Java and Brew distribution channels and focusing on freemium games for smartphones. The first titles will be announced in September with releases starting in October.

We caught up with CEO Niccolo de Masi to find out why he thought this change was necessary and what the future holds for the new look Glu.

Pocket Gamer: Why are you so bullish about turning Glu Mobile into a freemium publisher?

Niccolo de Masi: Over the past seven months, I've been working to preempt the shift that's happening in our industry. We've already seen the price of iPhone titles slide from $9.99, to $4.99 to $1.99 to 99c. But in the longrun what we'll be competing for is users' time and engagement.

We think Glu has a unique advantage in terms of the volume of high quality titles we can produce that will work across all smartphones. That's important because when you're in the freemium business, it's the same as saying you're in the audience business.

How big does the market needs to be to generate decent revenues?

Social gaming on mobile is all about reach. Right now you're talking iPhone and Android, but over time, as everyone upgrades their phone, they're going to get a smartphone so there will be lots of other providers.

And when you have the potential to reach a billion people and they can play your games against each another, those games have a pretty good chance of doing tens of millions of dollars of revenue every year.

There will be very big titles created on smartphones. We want to be the first company who creates recognisable brands on smartphones. I think you'll be able to build brands on smartphone first rather than build brands on Facebook and console and bring them to mobile as happens at present. Reach is the critical component to make that happen.

How will your freemium games differ from what we've seen on Facebook?

Some concepts that work on Facebook will also work on mobile, but you're going to see plenty of innovation from Glu. I think there's an opportunity for us to innovate in more genres than simply the farming one.

Traditionally, Glu has worked on a lot of licensed games but now you seem to be talking more about original content. Why?

Our value creation proposition for shareholders is that we want to build up a huge audience of Glu users across all smartphone platforms, and we also want to build up IP franchises that have enduring value on all platforms, not just smartphone. This is a deliberate value creation proposition.

Technically how hard is this?

Making and launching your game across all smartphones isn't trivial. For example, Apple has a different approval process than Android, than Microsoft and Palm. The rest of the infrastructure is fairly similar though. We have 450 people and the technology platforms to do this and that's not quick or cheap to replicate, so it's a competitive advantage for us.

We view ourselves as being able to homogenise smartphone fragmentation so you'll get the same game experience as your friends no matter what phone you have.

What about creating your own social graph?

Our core competence is bringing our games to all users, building up a big Glu gaming audience and creating great IP. We're not trying to compete with Facebook. We want to use the social graphs that turn out to be big, whether that's Facebook or Apple's Game Center.

I think some companies who have jumped into these areas a little too early have now found they've wasted a year or two trying to compete with the Game Center or iAd.

Our view of platforms, whether it's the operating system or the social graph, other companies will make those areas their sole objective. We're agnostic so we'll make sure our games work everywhere and we can ride the growth of smartphone social gaming independent of who's successful on a platform level.

How do you view the competition between the likes of Apple, Google and Microsoft?

Apple had a two year headstart but by the end of 2010, I think you'll see Android and Windows devices closing that gap in terms of hardware power, ad networks and merchandising. AdSense already works very well on mobile for example.

Apple will probably always be in the lead, because if you control your hardware, your software and your content, you can get stuff done faster. The gap will narrow though and once it's down to six months and the technology is generally good, it will be a more level playing field.

The other issue is that most analysts think Apple will get a maximum of 15-20 percent of global smartphone market, so the other 80 percent is going to be other mobile companies.

Does Glu have any plans outside of mobile?

We want to be the biggest mobile social gaming specialist - the Zygna of mobile if that's possible - before we think about other platforms. Yet, our biggest partners are Apple, Google and Microsoft and those companies have a path to the living room.

I'd be surprised, over the longterm, if Apple TV and Google TV don't get app stores while Xbox Live Arcade is already attached to Windows Phone 7. To that extent, Glu is well positioned to be a growing and disruptive force in the games sector as a whole.

Thanks to Niccolo for his time.