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Mobile gamer Glu readies for $92 million IPO

Initial public offering filing comes as casual-game market emerges as a significant driver of growth in the game industry.

Marguerite Reardon Former senior reporter
Marguerite Reardon started as a CNET News reporter in 2004, covering cellphone services, broadband, citywide Wi-Fi, the Net neutrality debate and the consolidation of the phone companies.
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Marguerite Reardon
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Glu Mobile, a publisher of mobile games, has filed for an initial public offering with the Securities and Exchange Commission. The planned IPO is expected to raise up to $92 million.

The San Mateo, Calif., company filed for the IPO on Tuesday and plans to list its shares on the Nasdaq using the symbol GLUU.

The IPO comes as the casual-game market is emerging as a significant driver of growth in the game industry, according to analysts from market research firm M:Metrics.

Casual games refers to a category of software-based entertainment that includes word and puzzle games, board games, and even some classic arcade titles. While not new, the casual-games industry is enjoying a renaissance driven by advertising dollars and the use of mobile devices. Because casual games tend to be small and have minimal processing needs, they're ideal for cell phones.

"Casual games hit the sweet spot in mobile gaming," said Seamus McAteer, a senior analyst for M:Metrics. "And Glu Mobile has succeeded in building its share in the market based on a strong portfolio of titles and some savvy acquisitions."

Among publishers of mobile games, Glu Mobile ranked second in October in terms of new game downloads. Electronic Arts Mobile, publisher of popular games such as Tetris and Bejeweled, ranked No. 1 with 27 percent of the mobile-gaming audience. Glu Mobile's No. 2 ranking came with 10.8 percent, according to M:Metrics. Glu Mobile has done well with retro titles such as Centipede and Monopoly, a title it got from its acquisition of iFone.

The North American market for casual games is expected to grow from an estimated $281 million in sales this year to $1.15 billion in 2011, according to market research firm DFC Intelligence. These casual games are even more popular in Asia and Eastern Europe, two markets Glu Mobile hasn't addressed yet, but is poised to enter.

McAteer believes Glu Mobile's IPO filing could spur bigger companies to think about an acquisition. In 2004, Jamdat filed for an $86 million IPO. The company was sold to Electronic Arts for $680 million the next year.

"Going public is a great way to maximize shareholder value," McAteer said. "There's no way Jamdat would have gotten $680 million for the company if it hadn't gone public."

Who might be interested in Glu Mobile? Activision, the old-school video game publisher, hasn't made a major mobile play yet, McAteer noted. Vivendi Universal or even Viacom's MTV may be interested in Glu Mobile, he said.