About Glu Mobile

Glu Mobile Inc. develops, publishes, and markets a portfolio of free-to-play mobile games designed to appeal to a broad cross section of users who download and make purchases within its games through direct-to-consumer digital storefronts, such as the Apple App Store, Google Play Store, and others (Digital Storefronts). The company is a subsidiary of Electronic Arts Inc. The company has a portfolio of compelling games based on its own intellectual property, such as Cooking Dash, Covet Fashion, Deer Hunter, Design Home, and Diner DASH Adventures, as well as games based on or significantly incorporating third party licensed brands, including Disney Sorcerer’s Arena, Kim Kardashian: Hollywood, the MLB Tap Sports Baseball franchises and Restaurant Dash with Gordon Ramsay. As of December 31, 2020, the company had approximately 2.5 million daily active users and 11.2 million monthly active users of its games on its primary distribution platforms, including Apple’s App Store and the Google Play Store. As of December 31, 2020, the company had approximately 2.1 billion cumulative installs of its games on its primary distribution platforms, including approximately 13.6 million installs during the fourth quarter of 2020. Products The company develops and publishes a portfolio of mobile games designed to appeal to a broad cross section of the users of smartphones and tablet devices. Its portfolio of growth and catalog games is spread across the following genres: Lifestyle Design Home, which launched in November 2016 and was acquired as part of the company’s acquisition of Crowdstar Inc. (Crowdstar), has become its most successful growth game. Design Home allows users to participate in daily Design Challenges in which they style three dimensional spaces with real, high-end furniture and décor. The company has continued to introduce key updates for Design Home, including elite events for elder players; improved series challenges; language localization in German, French and Spanish; meta game functionality; and the introduction of e-commerce functionality. Covet Fashion, which the company acquired as part of its acquisition of Crowdstar, is a top grossing fashion title that was the company’s third largest revenue contributor during 2020. Covet Fashion features continually changing content and daily Style Challenges to help drive engagement and monetization of its users. During 2020, the company introduced its new customizable hair accessory feature, as well as its new Covet Collection Pass subscription, both of which provided additional opportunities for its users to express their creativity. The company expects to add to its portfolio of lifestyle titles in 2021 through the worldwide release of Table & Taste, a game that will allow users to play and engage with food pairings, aesthetic and décor to create immersive dining experiences, as well as the company’s Crowdstar Moments suite of hypercasual games that it expects will help drive engagement across the company’s lifestyle portfolio. Casual Diner DASH Adventures, launched in June 2019, is the latest title in the company’s Dash franchise. Diner DASH Adventures offers world decoration, a deep story, and an innovative consolidation of different Dash time-management styles. Kim Kardashian: Hollywood is a narrative role playing game featuring Kim Kardashian-West’s likeness, voice and creative influence as she guides players on their journey to success in Hollywood. The company globally launched Kim Kardashian: Hollywood in June 2014. Cooking Dash was launched in June 2015 and had its last significant content release in 2019. The company utilized this release to help drive awareness and direct traffic to the launch of Diner DASH Adventures. While the company is no longer developing new content for Cooking Dash, it has automated event features that are continuing in an effort to maximize revenue from this title, and this title will maintain its position as one of the company’s top catalog games in 2021. Restaurant Dash with Gordon Ramsay, launched in June 2016, utilizes Gordon Ramsay’s personality to guide users to become a restaurateur in the image of Mr. Ramsay. The company is no longer developing content updates for this title, but have automated event features that are continuing in an effort to maximize revenue from this title. Role Playing Games (RPGs) Disney Sorcerer’s Arena, which launched in the first quarter of 2020, is a strategy role playing game featuring dozens of characters from across the Disney and Pixar film franchises. Disney Sorcerer’s Arena continually provides updates to introduce new in-game content, challenges and events, including new characters from Disney and Pixar film franchises. Sports and Outdoors MLB Tap Sports Baseball 2020, which launched in March 2020, was the seventh installment in the company’s popular Tap Sports Baseball franchise in which it partnered with the MLB (Major League Baseball), the Major League Baseball Players Association (the MLBPA), and the Major League Baseball Players Alumni Association (the MLBPAA) to include real-world current and former baseball stars from each of the MLB’s 30 teams. The MLB Tap Sports franchise was the company’s second largest revenue contributor and the highest ranked baseball title in the Apple App Store’s U.S. iPhone top grossing games rankings during 2020. The company expects to launch MLB Tap Sports Baseball 2021 in March 2021 in more than 100 territories with significant new features, including a new event mode and World Ranking Season. Deer Hunter 2018, originally launched in September 2015 as Deer Hunter 2016, remained as one of the company’s top action titles during 2020. The company expects to add to its portfolio of sports and outdoor titles in 2021 through the worldwide release of Deer Hunter World, the next iteration of its Deer Hunter franchise, as well as the expected release of a social fishing game, Tap Sports Fishing. Sales, Marketing and Distribution The company markets, sells, and distributes its games primarily through direct-to-consumer Digital Storefronts, such as Apple’s App Store and the Google Play Store. In addition to publishing its smartphone games on direct-to-consumer Digital Storefronts, the company publishes some of its titles on other platforms, such as the Mac App Store and Facebook. In addition, the company is exploring the extension of Tap Sports Baseball and Design Home to the PC web browser. The company generated the majority of these iOS-related revenue from the Apple App Store, which represented 56.2% of its total revenue in 2020, with the significant majority of such revenue derived from in-app purchases. The company generated the balance of its iOS-related revenue from offers and advertisements in games distributed on the Apple App Store. In addition, the company generated approximately 38.4% of its total revenue in 2020 from the Android platform. The company generated the majority of its Android-related revenue through the Google Play Store, which represented 32.9% of its total revenue in 2020. The company generated the balance of its Android-related revenue from other platforms that distribute apps for devices that run the Android operating system (e.g., the Amazon Appstore) and through offers and advertisements in games distributed through other Android platforms. Strategy The company’s strategy includes building growth games and maximizing the value of catalog games; attracting and fostering creative leaders, including potentially by selective acquisitions; and cultivating highly creative environments. Seasonality Because many players download the company’s games soon after they purchase or receive their new devices, the company experiences seasonal sales increases based on the holiday selling period. Although the majority of this holiday impact occurs during the fourth quarter (year ended December 2020), some of this seasonality also occurs for the company in its first calendar quarter due to some lag between device purchases and game purchases. However, the impact of this seasonality on the company’s operating results is significantly affected by its title release schedule. For example, the company has historically released each year’s new version of its Tap Sports Baseball franchise late in the first quarter, which has resulted in revenue from this title peaking in the second or third quarter, with declining revenue in the fourth quarter and the first quarter of the following year leading up to the launch of the next version of the title. In addition, companies’ advertising budgets are generally strongest during the fourth quarter and decline significantly in the first quarter of the following year, which affects the revenue the company derives from advertisements and offers in its games. Conversely, the company’s cost per install and cost per ad view also increase in the fourth quarter, since demand for marketing is higher during the holiday season. Intellectual Property The company’s trademarks that have been registered with the U.S. Patent and Trademark Office include Glu, Crowdstar, its 2-D ‘g’ character logo, its 3-D ‘g’ character logo and several of its game titles, including Cooking Dash, Covet Fashion, Deer Hunter, Diner Dash, and Tap Sports. In addition, the company has trademark applications pending with the U.S. Patent and Trademark Office for other of its game titles. The company also owns, or has applied to own, one or more registered trademarks in certain foreign countries, depending on the relevance of each brand to other markets, including registrations for Design Home. As of December 31, 2020, the company had seventeen issued U.S. patents and two U.S. patent applications outstanding, including two that it inherited through acquisitions, thus precluding its ability to protect the majority of its technologies from independent invention by third parties. In addition, it has filed foreign patent applications on two of the issued U.S. patents. The company also uses third-party development tools to create many of its games, including a game development engine licensed from Unity Technologies ApS to create most of its newest games. Competition The company competes with a continually increasing number of companies, including Activision (the parent company of King Digital Entertainment), Disney, Electronic Arts Inc. (EA Mobile), Gameloft, Netmarble (including its Kabam Games subsidiary), Rovio, Stillfront, Warner Brothers, and Zynga, as well as many well-funded private companies, including AppLovin, Epic Games, Jam City, Miniclip, Niantic, Playrix, Pocket Gems, Scopely, and Supercell. In addition, the company faces competition from mobile applications and websites focused on the home design market, which may include games, e-commerce titles, design applications and others seeking to displace its Design Home title, which is a leading title in the unsaturated home design application market. Competitors in this space include Redecor – Home Design Makeover published by Reworks Oy (Reworks). The company also competes for downloads and time spent on mobile devices with companies that develop popular social media and messaging applications, such as Facebook (with its Facebook, Facebook Messenger, Instagram, WhatsApp and other applications), Pinterest, Reddit, Snapchat, TikTok, Twitter, and YouTube; and companies that develop streaming music, movie and television applications, such as Pandora, Spotify, Tidal, Disney+, HBO Go, Netflix, Amazon Prime and Hulu. Research and Development The company’s research and development expenses were $119.7 million in the year ended December 31, 2020. History The company was founded in 2001. It was incorporated in 2001 in Nevada. The company was formerly known as Sorrent, Inc. and changed its name to Glu Mobile Inc. in 2005.