Glu Mobile Inc. (GLUU) is Not Over yet

In addition, Glu’s long-term plans of reaching a wider audience look commendable. The company has created a separate publishing division, through which it would partner with third-party developers across the globe for developing titles for different platforms, countries or languages. The publishing division will kick off 2013 with four releases, and plans to move aggressively in 2014 by hitting a run rate of one title per month.

At the right places

Another impressive thing about Glu is that its games have presence across various operating systems. Hence, growing sales of tablet and smartphones, coupled with the company’s presence across each ecosystem should be an advantage in the long run. For instance, the company was expected to rake in two-thirds of its revenue from Apple Inc. (NASDAQ:AAPL)’s iOS store last year.

When Apple released the iPhone 4S, Glu witnessed a solid jump in revenue, but it failed to do the same this time due to launch delays. The failure to capitalize on the 47.8 million iPhones sold by Apple during the holiday quarter should have hurt Glu hard, but it should be kept in mind that the delay was a one-time event. Given the company’s solid release pipeline of 15 titles this year, I believe it won’t miss out on such opportunities again. Also, it expects its revenue from Google Inc (NASDAQ:GOOG)’s Play store to improve as well.

Gambling ahead

Apart from these moves, Glu has also been making forays into real-money online gambling. After entering into a partnership with U.K.-based mobile gambling company Probability PLC last year, it picked up a stake in casino startup Bee Cave Games earlier this year.

Online gambling is gradually finding acceptance across the globe, with Nevada and Delaware being the states in the U.S. that permit internet gambling. New Jersey is in line to become the third state, but it might take some time before a definitive bill is passed. Thus, with small investments and strategic partnerships, Glu is trying to position itself in order to benefit from online gambling.

The takeaway

Glu Mobile has taken quite some hits over the past few months, but it’s worth a gamble at its current levels. The company is looking to improve and prefers long-term achievements over short-term gains. Moreover, it seems to have the backing of its management, as evidenced by insider buys in the past three months. Also, Glu Mobile’s non-GAAP gross margin improvement to 90% in the previous quarter from 87% in the prior-year period tells us that the company is efficiently going about its business.

Hence, it’s not at all surprising that Glu shares have risen 14% since they crashed post earnings as investors scooped up low-priced shares that could deliver long-term gains. Hence, if you’re patient enough and intend to profit from the evolution of mobile gaming in the long run, Glu Mobile might just be the perfect candidate.

The article This Mobile Gaming Play is Not Over yet originally appeared on Fool.com and is written by Harsh Chauhan.

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