Market Watch

Gameloft Sees Q3 Growth


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French mobile games publisher Gameloft grew ten per cent year-on-year in Q3 2010, posting revenues of $44.8m making it the only one of the traditional "big three" Western mobile games publishers to grow during the quarter.

Leading Western mobile games publisher EA Mobile recorded its first year-on-year decline in revenues as it achieved Q3 revenues of $49m (down six per cent on Q2 2010 and four per cent down on Q3 2009).

Glu Mobile continued to see its revenues decline. It reported Q3 revenues of $15.5m (21 per cent down on the $19.6m it achieved in Q3 2009 and three per cent lower than its Q2 2010 revenues of $16m). On a more positive note, Glu continued to cut its losses in Q3. Its Q3 2010 net loss was $1.6m, compared with almost $4m in the same quarter 2009 and $3.2m in Q2 2010.

Analysis
Glu has set out a new strategy to improve revenues and profitability, but Screen Digest does not expect to see much improvement before 2011.

Gameloft's strong performance was primarily driven by its ongoing success on Apple's App Store for its iOS (iPhone, iPad and iPod Touch) devices. Gameloft has released 19 iPhone titles in the year to Q3 2010, making it the most prolific major Western mobile games publisher for iOS devices. Gameloft also reported a solid performance from its legacy network operator distributed games business.

EA Mobile's revenues suffered from a slowdown in its network operator distributed mobile games business coupled with a weaker line-up of iPhone games (largely drawn from sequels and spin-offs of existing brands).

Glu reported $2.3m revenues from its smartphone (Symbian, iOS, Android, BlackBerry) games, accounting for 15 per cent of total Q3 revenues. Microtransactions and advertising made up 25 per cent ($0.58m) of smartphone revenues. Glu's Q4 2010 strategy sees it transition to more persistent games with social and community features, monetised via microtransactions and advertising. Screen Digest expects these games to improve Glu' smartphone revenues in Q4 2010, but does not expect this strategy to halt the overall decline in revenues in Q4.

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