Glu Mobile experienced some significant disappointments in the third quarter of 2012. Nine of the 11 games it released were considered financial disappointments, and users did not spend as much on in-game purchases. To remedy this, Glu has decided to focus on what Glu CEO Niccolo de Masi calls freemium 2.0 gaming. Glu’s freemium 2.0 games will contain community elements. Expect more PVP and social features in Glu’s games in 2013.
Glu categorizes multiplayer games as freemium 2.0, whereas Glu’s single player offerings are considered to be freemium 1.0. Community-driven gaming was one of the main reasons why Glu purchased GameSpy Technology in August. It’s Glu’s belief that multiplayer games with a PVP element is where gamers are spending most of their money.
“Our hypothesis is that the percentage of people paying has reduced by virtue of the fact that they are staying on the community based PVP games for longer or at least the payers are,” Masi said on an earnings call with investors.
“Because there are lot more reasons for you to stay in your game, if you know the people you are playing with and against. And ultimately more reason for you to pay, and more reason for you to pay more, and more reason for you to pay more continually.”
That’s not to say Glu sees no reason to continue with freemium 1.0 games. Games that were among the first in its genre such as Contract Killer tend to retain plenty of players even if it has no community element.
“Games like Contract Killer 2 are very much a freemium 1.0 single player action arcade game,” Masi said. “But you can see that if it’s prosecuted well in the execution the game can still be comfortably top 25 iPad, top 50 iPhone grossing. And so our portfolio is likely to be a balance between improved execution on freemium 1.0 products and freemium 2.0 revitalization next year.”
Glu also decided to extend the time between sequels. Blood and Glory Legend for example was released less than a year after the original Blood and Glory. Blood and Glory Legend ended up getting fewer downloads and made between 30%-40% of the peak revenue of its predecessor. Glu’s solution to this problem is to space sequels apart by 12 months, and make enough changes in sequels to set them apart from the original.
“And so we obviously be confident of the fact that getting users to refresh does require innovation in the gameplay,”said Glu CFO Eric Ludwig. “And so Contract Killer 2, if you look at it, it has now the sniping mechanic, but it also has things like melee and on the ground run and gun strategy to it, not simply the original shooting people in the head out the window. And so we advanced production values there, there we’ve advanced the core gain loop. And I think players are obviously responding to that based on where it is right now.”
Glu is also considering reevaluating its monetization and progression strategies of its games based on the recommendations of its new President of Studios Matt Ricchetti. Five games have been pushed to 2013 in order to undergo this evaluation. I’m interested in seeing if Glu will change the way it makes progression in its games. Its games are usually an extremely difficult or tedious experience if players don’t spend real money. Here’s hoping for change.
Source [Glu Mobile]