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Glu reloads its war chest for mobile game acquisitions

Glu Mobile has grown into an enormous mobile gaming writer by means of each acquisitions and home-grown titles. But because the world adjustments across the firm, Glu is altering with the instances.

Back in June, the San Francisco-based firm raised $151.eight million in a secondary public providing. That gave it a war chest to pursue new acquisitions. Making good use of that cash would be the job of Chris Akhavan, senior vp for enterprise improvement, company improvement, and promoting at Glu.

Other rivals reminiscent of Scopely have been busy shopping for different firms. In reality, within the second quarter, the worth of game acquisitions and investments topped $7.eight billion, in keeping with knowledge collected by game funding specialist Sergei Evdokimov. During the quarter, Zynga purchased Peak Games for $1.85 billion.

But Glu additionally has its personal studios engaged on titles reminiscent of MLB Tap Sports Baseball, Deer Hunter, Covet Fashion, Design Home, and others. It not too long ago printed Disney Sorcerer’s Arena, and extra video games are coming. I talked to Akhavan in regards to the general technique.

Here’s an edited transcript of our interview.

Above: Glu Mobile’s Chris Akhavan.

Image Credit: Glu

Chris Akhavan: We issued a secondary, and the whole quantity was $151.eight million, again in June. That was an amazing milestone for the corporate. A giant a part of that was to offer us the pliability to pursue M&A, one thing that we’ve kicked off the 12 months with a higher deal with. People don’t notice that Glu has been constructed on — numerous our profitable titles and studios that we now have as we speak, at one level they originated by means of an acquisition.

Going again to 2011, we acquired Blammo Games. They went on to create the Kim Kardashian game. In 2012 we acquired the Deer Hunter IP from Atari and went on to have a really profitable franchise with that IP. We have the subsequent model of Deer Hunter at present in improvement. In 2013 we acquired a small studio that’s now develop into our sports activities studio, with the MLB Tap Sports Baseball franchise, certainly one of our high video games. In 2014 we acquired PlayFirst, which made the Diner Dash franchise. Tom Hall was a part of that. And then clearly in 2016 we had the CrowdStar acquisition, which introduced us an exceptional studio with Covet Fashion and Design Home.

If you take a look at the corporate as we speak, it’s composed of numerous nice groups and IP that initially got here to the corporate by means of an acquisition. We set out this 12 months considering that the corporate was in a great place foundationally. The firm had restructured over quite a few years to deal with what we name “growth games,” video games we function over the course of a protracted time frame. We felt like we’re now in a great place the place we will deliver on one other nice studio and crew into the image and help their development. The capital elevate was to offer us the pliability to pursue acquisitions if we discover a good match.

Disney Sorcerer's Apprentice has debuted on iOS and Android.

Above: Disney Sorcerer’s Apprentice has debuted on iOS and Android.

Image Credit: Glu

GamesBeat: With that quantity of capital, are you seeking to catch studios in a sure stage of their development, earlier than they’ve hit the large time?

Akhavan: We look throughout the spectrum. If you take a look at our prior offers, just like the crew that in the end grew to become our Tap Sports Baseball studio, that was an acqui-hire. At the time, once we met them, it was a three-person crew that was keen about making mobile sports activities video games. They had a cool prototype of a soccer game that was very mobile pleasant, social, and straightforward to play. We noticed an amazing crew we may construct with, so we introduced them on board and gave them the sources to construct out a full studio, and in addition assist them get licenses with MLB and the MLBPA. Over the years that franchise has grown phenomenally. Through the tip of Q1 that studio has achieved $278 million in bookings as a part of Glu. That originated from a small three-person acqui-hire.

On the opposite finish of the spectrum, CrowdStar was a extra mature studio once we acquired them. They had Covet Fashion reside and working for a number of years on the time. They had Design Home in beta. That was a extra mature studio that had an amazing reside title and an impending launch. Glu was in a position to assist put money into the studio and develop that studio by means of scaling up the crew even additional, investing closely in person acquisition, and every little thing else that’s fueled the expansion of the studio.

We’re open to the total spectrum, from earlier stage alternatives the place we see a great DNA match that we might help speed up, by means of to mature and even doubtlessly extra mature than we’ve achieved previously. The funding we raised was extra to offer us the pliability to pursue something throughout the vary I talked about. If we do discover a good match, we’re able to go from a funding perspective to have the ability to pursue an acquisition.

GamesBeat: How did your position change right here, your tasks?

Akhavan: I’ve all the time been concerned in corp dev throughout my seven-plus years at Glu. I’ve labored on our prior offers. But I additionally used to supervise different components of the enterprise, together with issues like advertising and marketing and UA. At the start of this 12 months, I handed that off to focus extra on corp dev. My position now could be very corp dev-heavy, however I additionally nonetheless deal with biz dev and our promoting income enterprise, which continues to be a significant enterprise for us. My position change was actually letting go of a few of the prior components of the enterprise to focus extra on corp dev and our pursuits in that space.

GamesBeat: How does the game trade look for this type of alternative now, the M&A chance?

Akhavan: We’ve seen continued consolidation. Our friends at firms like Scopely and Zynga and Stillfront have all been energetic. We assume there are nonetheless numerous alternatives on the market, and we expect that consolidation pattern is more likely to proceed. As the mobile gaming ecosystem evolves, issues develop into extra aggressive, and scale turns into an rising benefit. We’re seeing numerous studios that is perhaps doing nicely as we speak — they’re beginning to see the advantage of turning into part of a bigger participant, the place they’ll faucet into shared infrastructure, and even simply the capital to gas funding in issues like UA. It can provide studios extra alternatives to deal with making and working superb video games, whereas they let the father or mother firm assist them with numerous that central infrastructure and help, so that they don’t need to reinvent the wheel on numerous these constructing blocks which can be extra scalable.

GamesBeat: That technique has virtually develop into a necessity. If everybody else is doing this out there, then it’s a forcing operate. You need to eat or be eaten.

Akhavan: The market is certainly requiring one other tier of functionality to achieve success as we speak. You need to be nice in so many areas, from analytics to UA to, in lots of circumstances, advert monetization. Product advertising and marketing, PR. When you begin to add it up, it turns into a large effort for even a 50-person or 100-person studio, to construct an amazing game and in addition be nice in any respect of these further features. Whereas plugging into a much bigger writer like Glu, you get entry to phenomenal expertise that may help you in these areas and permit that core studio to deal with making nice merchandise, which is in the end what studios need to focus their vitality on.

GamesBeat: How do you take a look at the important thing benefits of Glu? What do you see as one thing that helps Glu on this technique?

Akhavan: We’re sturdy in UA and advertising and marketing, for positive. That’s a core power. But what’s distinctive about Glu is our deal with development video games. We’re not a high-volume enterprise the place we’re cranking out title after title. We’re very selective in investing in titles that we expect have that very lengthy development potential. “Products that can last for decades” is what we all the time attempt to create and nurture. Our benefit is having expertise in constructing these development video games and accelerating them and displaying that observe document of 12 months after 12 months of enchancment and development, going deeper on these properties. Whether it’s Design Home or Tap Sports Baseball, we’re all the time discovering methods to evolve these experiences and ship extra to the viewers, in addition to discovering revolutionary methods to faucet into new audiences.

When we strategy a studio, that’s one thing they discover enticing about Glu. When we place a wager on a title or franchise, they know that we’re going to take it severely and make investments deeply, versus different publishers which may dabble in putting many alternative bets to see which of them work out. We’re extra intentional in the place we apply our sources and focus. Where we see that potential, we lean in very closely, and throughout the spectrum — advertising and marketing, UA, and every little thing else when it comes to supporting the studio. For instance, issues like person analysis groups that may help them in understanding their viewers at a deeper stage. That’s necessary while you’re attempting to create that multi-year relationship together with your gamers.

Above: Covet Fashion has launched greater than 50 completely different feminine physique varieties.

Image Credit: CrowdStar/Glu

GamesBeat: The instance you introduced up of the small sports activities crew rising up and being matched with a license, that’s a transparent approach to unlock the worth of that crew.

Akhavan: It was comparable with our Toronto studio, the one which was acquired in 2011. They had initially created a game known as Stardom Hollywood once they joined Glu. Later on, Glu helped them get the partnership with Kim Kardashian, which clearly led to phenomenal success. It’s one other instance the place our experience in working with IP was one thing we had been in a position to deliver to the desk to assist a studio succeed.

GamesBeat: What do you consider the potential of mobile video games? I spend numerous time throughout the entire spectrum, and I not too long ago spent numerous time with The Last of Us Part II. It’s a really attention-grabbing, very satisfying factor to play and write about. I’m wondering if mobile video games can or ought to have the identical form of ambitions as triple-A video games. And if not, what’s the alternative, the factor that may very well be pushed for?

Akhavan: There are undoubtedly alternatives for mobile video games to develop past what folks traditionally affiliate with them. It may look completely different in comparison with what you would possibly count on from a triple-A PC or console expertise. Maybe that’s not precisely what you get on mobile. But as a common theme, providing players and shoppers a lot deeper, extra significant experiences is one thing that I see creating and evolving in mobile.

Design Home and Covet Fashion are good examples for us, the place these are — you could possibly name them video games, however they’re actually past only a game. They’re including worth to the lives of people who work together with these merchandise, giving them an outlet for creativity, an outlet to be taught extra about design or trend that impacts their actual lives. Ultimately it offers them a connection to different people who have shared pursuits, the place they’ll collaborate and bounce concepts off one another. Through that I feel you’re seeing a lot deeper connections and experiences creating by means of mobile video games.

Certainly there’s a chance, although — a game like Last of Us is a good instance of compelling narrative and depth of character improvement. We haven’t seen numerous that but in mobile, however it’s not one thing that may’t be viable on the platform. You simply must rethink the way you ship it in a method that is sensible on a small cellphone versus a PC monitor.

GamesBeat: Games for numerous audiences appears to be an space the place you’ve excelled. That’s one other extra fertile path, perhaps.

Akhavan: Those merchandise serve an underserved market. Largely girls make up the viewers for each of these titles. Traditionally the mobile game trade simply says, “Well, we’ll make another farming game, or a match-three game.” Instead, these merchandise supply significant connections to the true lives of the people who work together with them. Beyond that, they provide a real artistic outlet, the place they’ll categorical and develop their creativity. They function in areas that weren’t overly saturated, and the place there was this huge demand from shoppers to have a unique form of interactive leisure expertise that simply wasn’t being supplied beforehand.

GamesBeat: As far because the footprint you might have, how a lot curiosity is there in worldwide markets, like China? Because of the place we’re with COVID, is there any specific geographic curiosity in the place you need to develop?

Akhavan: Glu is fairly closely concentrated in North America. We’ve talked previously about how we now have a want to develop internationally. In specific we’ve been targeted on growth efforts in Europe. It’s one thing we’re trying for. Should any acquisition match with a chance to develop internationally, that will be a plus.

Touching on what you hinted at with COVID, one of many challenges lots of people are dealing with in corp dev, clearly you possibly can now not journey to studio and do what you usually do, have these multi-day visits the place you spend all day on website assembly folks and getting a really feel for the tradition. Those dinners you might have after a protracted day collectively, the place you get extra of that non-public connection, that’s difficult to do now once we’re on video calls all day.

Fortunately numerous the relationships we had previous to this all occurring, so we will construct on these. We’re not letting the present state of affairs gradual us down. We’re engaged on video and doing what we will to take care of the identical potential to construct these relationships on this new setting all of us need to work with. But we’re open to a broad vary of geographies within the studios that we discuss to.

Above: Glu Mobile’s Design Home.

Image Credit: Glu Mobile

GamesBeat: Looking on the alternative that you just discovered to lift cash this 12 months through the pandemic, video games appear higher off than many different industries proper now.

Akhavan: The game trade has been lucky. People have turned to gaming extra broadly on this time, the place different types of leisure aren’t out there. My private viewpoint is it’s additionally introducing lots of people that weren’t engaged with video games into the gaming world. For the entire trade, we’re going to see this as one thing that drove an acceleration, extra folks turning into players and discovering that video games will not be simply easy leisure anymore. You can discover significant friendships and create significant relationships by means of video games.

I all the time inform my spouse — I’m an enormous PC gamer myself, however for me it’s how I am going and hang around with my associates. We’re on Discord voice chat with one another whereas we play a game like Valorant or Counter-Strike. This second, for lots of people, has launched them to the truth that whereas we will’t join with one another in particular person, video games present an outlet to take care of relationships and create new relationships. That’s been one of many positives, if there’s one, to return out of the troublesome state of affairs we’re going by means of this 12 months.

GamesBeat: What are you enthusiastic about so far as transferring ahead together with your workforce throughout this time? We have the pandemic, we now have Black Lives Matter, we now have sexual harassment crises. All these items are weighing very closely on the workforce.

Akhavan: Personally I’ve been impressed by how Glu has responded to what’s occurred with the Black Lives Matter motion specifically. We’ve addressed that in an enormous method internally. We’re having numerous conversations right here, and we’ve rolled out coaching applications for all of our workers on unconscious bias, allyship, energy and privilege. This morning I used to be engaged on unconscious bias coaching. It’s good to see that Glu is stepping up inside our group and dealing on to help the trigger. In addition, we’ve made a donation to the NAACP and the Equal Justice Initiative. I’ve seen comparable from numerous different gaming firms. I’ve been impressed to see the trade step up and play an necessary position there.

In phrases of the working from house setting that we’re coping with, Glu has been listening intently to our expertise and understanding what’s working, what’s not working. People have combined challenges. Everyone could be very productive from house, so it’s been an amazing second the place we as a corporation have discovered that folks could be extremely productive on this distant format. But that comes with some challenges. There’s been burnout in being on Zoom video all day, not having that real-life private connection. Not everybody has a pleasant devoted workplace house at house. Maybe they don’t have the precise gear they want. They need to take care of these challenges.

We’re working with our expertise within the brief time period to make this as comfy as attainable, together with giving obligatory firm days off. People aren’t taking holidays now, and we need to be sure they’re taking time to relaxation. It’s arduous to try this when everybody’s plugged into their computer systems, so we now have full firm shutdown days we add on high of regular holidays.

Beyond that, in the long run we’re find out how to evolve, doubtlessly, the work construction between working at house and being in an workplace. We’re seeing huge advantages to working at house. The future of labor, even nicely past COVID, may very well be very completely different than it was pre-COVID. We may have a world the place folks work from their houses a part of the week, after which come to the workplace for a few days per week with extra of an intention to spend that point assembly with different folks. You may see extra of this hybrid workplace and residential mannequin being extra prevalent popping out of the pandemic.

Above: Chris Akhavan (left) and Nick Earl (CEO of Glu) stand on the entrance to Glu’s new headquarters.

Image Credit: Dean Takahashi

GamesBeat: One factor I’ve been enthusiastic about a bit is tales that need to do with the evolution of the game trade. I take a look at one thing like EA in 2008, once they had 60 video games in improvement, and now they launch perhaps six or eight video games a 12 months, however the income and revenue are far greater than they was once.

Akhavan: We have a miniature model of that. Back after I joined in early 2013, the corporate was cranking out video games on a regular basis. I really feel just like the month I joined, that month alone, the corporate put out three video games. It was a really completely different mannequin. There had been numerous sequels, Frontline Commando 2 and so forth. That rinse and repeat cycle — put out a game, monetize it for six to 9 months, after which you might have the subsequent game popping out. Certainly we’ve additionally made that evolution towards the expansion game philosophy of investing in fewer properties, however in a way more significant, long-term method.

GamesBeat: I’m wondering about adjustments in the entire trade, just like the rise of hypercasual video games. How would possibly that have an effect on Glu?

Akhavan: Hypercasual has been attention-grabbing. We’ve clearly been maintaining a tally of that market, given how vital a share of downloads have gone towards hypercasual video games. It’s a internet optimistic for the entire market, as a result of hypercasual is a good way to introduce folks that aren’t even informal players — perhaps you get them into these snack-sized 20-second session video games, after which that’s a pathway for them to get into extra significant and long-term engagement video games.

We know that’s occurring, as a result of when you play these hypercasual video games — play a stage, die in 10 seconds — the adverts you usually get are for extra long-term reside ops-oriented, free-to-play video games which can be designed for longer classes. We’re seeing hypercasual as this attention-grabbing funnel that perhaps brings in a really informal client, will get them aware of video games, after which doubtlessly, by means of the adverts they see in these hypercasual video games, they in the end transfer into deeper gaming experiences.

GamesBeat: On the M&A aspect, how a lot would possibly you contemplate that market?

Akhavan: We’re style agnostic basically in terms of M&A, however when you take a look at our prior observe document, we do numerous evaluation to know the place the alternatives are out there. I talked in regards to the sports activities studio. Back then we noticed an enormous alternative for mobile free-to-play sports activities that was broad open. Baseball specifically didn’t have a top-grossing game. That was one the place we thought there was an enormous alternative to take a position. We additionally talked about Design Home and Covet Fashion as being merchandise that had been sitting in their very own classes.

What I’ll say about that, we’re style agnostic. We’re prepared to have a look at studios throughout all kinds of genres. But we in the end need to put money into alternatives the place we expect there’s a differentiated market to go after, or a considerably rising market the place we will seize a significant share. We are inclined to shrink back from hyper-competitive, hyper-saturated markets, just like the social on line casino market. That’s one we’ve traditionally averted, the place you might have these large gamers in a hyper-competitive state of affairs.

GamesBeat: How do you take a look at a few of these long-time franchises, like Diner Dash? How usually do you could refresh that or change its path or in any other case preserve it producing income?

Akhavan: I need to say that PlayFirst began within the early 2000s on PC. We acquired the studio in 2014. Since becoming a member of Glu, they’ve launched a complete of 4 variations of Diner Dash. The first was the preliminary Diner Dash once they joined, which was the primary smartphone, actually free-to-play Diner Dash. They took the learnings from that and launched Cooking Dash, which was very profitable, together with the Gordon Ramsay Restaurant Dash game. Then Diner Dash Adventures is the newest installment in that franchise, launching final 12 months. While there’s been new SKUs launched in that franchise, it’s actually been an evolution of the franchise itself, that crew studying what their viewers is trying for and refining their strategy. It’s been a multi-year funding within the Dash franchise.

GamesBeat: What do you contemplate to be a few of the greatest areas of funding for you internally proper now?

Akhavan: We’re very targeted on our development video games. We’ll proceed to take a position closely in Design Home and Covet Fashion, in addition to our baseball title. In phrases of pipeline, we now have a brand new Deer Hunter in improvement, after which a few video games past that. We’re additionally persevering with to put money into the Disney Sorcerer’s Arena game that we not too long ago launched. The inner focus is continuous to refine and evolve experiences throughout these titles. We’re all the time seeking to up-level our central infrastructure and be capable of supply much more compelling device units over time to the studios we work with.

GamesBeat: How do you resolve that you could let go of a game, give it a break, or in any other case really feel like you possibly can’t be essentially the most aggressive in a selected house?

Akhavan: If I look again to the previous couple of years, there have been titles that we ended up strolling away from, or de-emphasizing. We had a WWE game that we created and launched, and it simply didn’t hit the mark. The KPIs weren’t the place we wanted them to be. We gave it a great effort and tried to proceed to refine, and after some time of doing that we concluded that the hole we’d must fill to make {that a} viable enterprise in the long run was simply too nice. We redeployed that crew’s sources to different titles.

We attempt to be very data-driven, and in addition client insights-driven. Look on the knowledge and perceive it, but in addition layer on the extra subjective items you can get by means of client insights, get that holistic view of how customers are experiencing a game. Whenever we resolve to not put money into a product, it’s as a result of the indicators coming from throughout that spectrum of knowledge and insights are telling us that we’re too far off the mark to create a long-term profitable development game.

GamesBeat: When it involves management from girls in game firms, and Glu specifically, how are you enthusiastic about that, making that attainable?

Akhavan: It’s been an enormous precedence for us, a part of our effort to enhance when it comes to variety and inclusion. We’ve added two girls to our board not too long ago. We’ve taken direct motion there. It’s an space the place we have to proceed to deal with and enhance variety throughout the spectrum of our expertise.

GamesBeat: How huge do you assume mobile goes to get, and how briskly is it going to develop towards the form of numbers persons are speaking about? Newzoo was speaking about three billion players by 2024. How ought to we take into consideration that? How a lot do you assume firms ought to attempt to develop consequently?

Akhavan: We’re clearly very bullish on the prospects for mobile in the long run. We’re nonetheless within the early days. Mobile video games are evolving shortly. There’s a lot room to enhance and develop extra significant experiences. When you take a look at issues we’ve talked about on this dialog, whether or not it’s hypercasual or video games like what CrowdStar dropped at market, video games that introduced in new audiences that weren’t beforehand players, that pattern will proceed. We’ll proceed to see attention-grabbing, compelling new experiences supplied within the mobile gaming world that may deliver within the subsequent wave of shoppers that don’t essentially work together with any video games as we speak. There’s numerous purpose to imagine that this market has loads of room left to develop.

GamesBeat: How do you’re employed with Nick Earl?

Akhavan: I work with him day by day. He’s massively supportive. He’s all the time prepared to get entangled. We have conversations with the studios. He’s keen about our tradition and the way we function at Glu. He does an amazing job of strolling new groups by means of what that appears like, so that they know that in the event that they do develop into part of Glu, they’re strolling right into a tradition that we’ve constructed with numerous care and intention. Nick has been crucial in that course of, being that voice for the corporate. He’s there on a regular basis to collaborate and bounce concepts off him. He’s all the time prepared to straight have interaction with new groups.

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