Tomahawk, WI 08/05/2014 (Basicsmedia) – Hit-maker of the Kim Kardashian video game, Glu Mobile Inc.(NASDAQ:GLUU), tumbled the most in more than 19 months after the company provided a gross profit margin that was narrower than the last period and below what Wall Street was expecting. Glu Mobile expects its profit margin for the third quarter to be 58%, down from 69% in the second quarter.
The drop in margin comes as Glu Mobile Inc. (NASDAQ:GLUU) plans to spend more on licensed games such as Kardashian’s, Hercules and Robocop. The game continues to do extremely well in the market highlighted by the fact that it helped bolster the company’s earnings in the quarter. The company’s ceo, Niccolo De Masi in an interview on CNBC stated that the company is set to continue beating estimates having done the same for the past 18 months.
“Looks philosophically; we have beaten near term quarterly guidance for every quarter of my tenure. We intend to carry on with that. We are definitely on unchartered territories; this is the first game of its type that has ever been top five grossing in the store, it’s innovative, it’s the best-rated game in the store, 60,000, five store reviews,” said Mr. De Massi in an interview on CNBC.
Glu Mobile Inc. (NASDAQ:GLUU) shares have surged in the market in the past few months amid the success of the game, Kim Kardashian, which was released sometime in June. The game is the highest grossing title for the global developer and publisher of free-to-play games for tablets. The popularity of the game continues to grow as the ceo reports that Kim Kardashian is extremely involved in it and is extremely promoting it
“I’ve said a number of times that she and I probably exchange an email or two a day, probably, a call every couple of weeks. She is involved’ in the look and feel of the game, content updates. She is obviously promoting it because she is proud of it. Reality is, it is the best-reviewed game in the apple store right now” said Mr. De Massi.
The game on its own has broken Glu Mobile Inc. (NASDAQ:GLUU)’s single-day revenue record with revenue soaring by 68% in the quarter to $49.9 million despite incurring a loss of $4 million.