- Follow the trends of the teenage chattering classes with disposable income and passion and you won't go wrong.
- Kim Kardashian: Hollywood is just the beginning of a major franchise success for Glu.
- ZNGA needs to focus on mobile and money gaming for long-term success.
When the market was talking about the Kim Kardashian: Hollywood release to the marketplace and the splash around it, it was old news. My three teenage daughters had already downloaded it, become "A" list celebrities and were busy with fashion choices they were more than willing to pay for given they were spending someone else's money.
Though I was already a big fan of Glu Mobile (NASDAQ:GLUU) and the direction they have taken with the success of Deer Hunter 2014, I immediately bought more stock and calls. The numbers from their press release below are impressive for sure:
GLUU milestones include:
- Single-day total company revenue record
- Highest single-day DAU in company history (10M+)
- Glu overall single-day revenues exceeding the previous one-day record each of the last 18 days
- Dino Hunter: Deadly Shores and Kim Kardashian: Hollywood simultaneously achieved #1 and #3 chart position on U.S. App Store Top Free for iPhone
Contrary to technical analysts and chart trackers who recently are calling for an exit in GLU for being overbought, the DAU and MAU numbers will only go up from here. Having a bunch of teenagers will open your eyes to the fact that the sentiment coming from Wall Street or Main Street is not necessarily tracking the pulse of the buyers and viewers of this type of fare. Kim Kardashian and the Kardashian clan may be mocked in the media and Wall Street but they are loved by the gossip-inspired.
The numbers above do not lie and the sustained momentum of the downloads prove the Kardashian influence. Every teenager, boys and girls alike, still follow "Keeping up with the Kardashians" and know every move of the family, view every Instagram post and play Kim Kardashian: Hollywood! Just wait until the spin-off versions hit the app stores -- they will be just as successful! GLU has a tremendous franchise on its hands and as anyone in Hollywood would tell you, it is all in the residuals!
On the other hand, my teenager daughters tell me Zynga (NASDAQ:ZNGA) is a hold at this point. I am a big believer in the turnaround and the big hoard of cash on hand but the current crop of games has no traction with the One Directioners. As a matter of fact, ZNGA should emulate the GLU model and come up with a Harry Styles app! I noticed that all my kids jumped off of Facebook some time ago and switched to the apps which garner their attention for ever smaller moments of time. I wonder if Vines will basically become photos to be shared!
With this change, the masses stopped playing most of the games in the ZNGA portfolio and the MAU count has dropped dramatically. I am a big fan of Mattrick and think he will bring games to the mobile world and will reenter money gaming with Zynga Poker. I got in early and will wait out the upside, my teenagers said so.
Disclosure: The author is long GLUU, ZNGA. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.