Please note in Q2FY16 Glu switched its operating metric from net revenue to bookings.ĭesign Home ( of which I’m a huge fan – but that’s for another post) has consistently remained Glu’s top performer since the acquisition of Crowdstar. I’ve compiled those graphs from Glu’s IR data and SEC filings ( some earning presentations were missing from Glu’s IR website). The above graphs illustrate how historically Glu’s flagship titles have struggled to sustain bookings after launch. It feels like Glu might have churned through those flagship titles quickly in the past – but that trend might be changing with Design Home and Tap Sports Baseball ( TSB). I would argue that in Glu’s case, the main problem might not be so much that a high percent of revenue comes from a select group of titles, as much as historically the contributions of those select titles have declined quickly and sharply. Having 76% of the company’s bookings coming from growth titles is not a problem – the fact that historically those titles haven’t stayed “growth” for long is. I feel like that line of reasoning does make sense and having those 3 titles account for a high percent of the company’s bookings is not necessarily a problem. Rather it’s a sign the company is successful at releasing new titles that generate revenue and help the company grow ( while also compensating for the declining performance of older titles). A high percent of revenue coming from growth titles means the company is not so much dependent on a group of declining titles.
In the Q&A period (listen at 36:00 here), Eric Ludwig the COO and CFO of Glu argued that having a high percent of revenue coming from those growth titles is a “healthy metric”.
Of course, in order for that to be a potential problem, you need to be working with a portfolio of titles to begin with – and that´s not always the case for a number of companies with a top grossing title. One line of thought could be that having such a large portion of the company’s bookings depend on a small number of titles is a bad thing – the idea being the more diversified the sources of bookings the less vulnerable the company to potential contingencies in Live Ops and fluctuations in game performance. Those 3 titles represented 76% of bookings. Last week Glu published it’s Q2FY18 quarterly results. Bookings were up 20% YoY and 15% QoQ at $99.4m, mainly driven by the company’s 3 “growth titles”: Design Home, Covet Fashion and Tap Sports Baseball ’18.
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