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Glu: Causing 3D Chaos And Mayhem To Conquer Mobile Gaming

Glu, one of the globes leading mobile and social gaming developers, is carving out its place of dominance within industry by combining 3D gaming with the “Freemium” style business model.  One of the first companies to take on the Android gaming market and succeed, Glu, is hoping that its early commitment and dedication to the market will secure it a leading position well into the future.

Glu

This is part 1 of a 2 part series surrounding Glu.  The follow up article on Market Platforms can be found here.

GWC, as part of their GMIC Roadshow,  took a delegation to meet with Glu at their offices this past Monday, so we felt it would be a good time to take a closer look at the company given what we learned. Glu, maker of such hit games as Gun Bros and Contract Killer: Zombies, is conquering mobile gaming by using 3D chaos and mayhem.  They’re making money through the current “soup de jour” of video game business models called “Freemium”.  Under the “Freemium” idea, a product is released to the public for free.  The catch is though that some of the product is locked away and only available if the customer pays to unlock it.   This does not mean that the product does not function if the customer does not pay.  The locked sections of the product are suppose to be “added benefit” sections rather than “core” sections.  Free+Premium = Freemium.  We’ll take a closer look at the financials in the follow up article.

One Big Family In A Small Market

One of the unique things about Glu is the size of the Glu team.  Glu has over 600 employees in the San Francisco Bay Area offices and over 100 here in Beijing.  Half of the Beijing office is dedicated to localization of Glu’s products to the Chinese market, so China is a big deal them.  The number of employees and and capital at Glu’s fingertips allows them to do things most social game developers cannot even dream about doing.

But the size is also part of the companies over all strategy.   Glu is a one stop shop.  They handle everything from the initial creation of game concept all the way through to publishing.  There are no middlemen to take their slice of the pie in Glu’s vertical structure.  Whether it is Android or Apple’s app store or the Chinese independent markets like 91.com, the distribution platform is the only bump in the road that exists in Glu’s supply chain highway between the designer thinking up a concept and the gamer playing the game.  They realize though that this “bump” is something they better leave to the others guys to handle because it’s a tough world.

As to the games themselves, Glu does not want to compete in the lower tier, casual levels of social gaming.  In those tiers, a 3 or 4 man team can produce a “Farmville” clone.  At Glu’s more hardcore level of social games, creating games requires much larger teams.  This obviously cuts down on competition, but the market for hardcore social games is much smaller currently than your casual social games. Glu doesn’t see this as a problem and is comfortable striving to be the dominant player in this niche.  Being one of the top 3 game developers in their market is their overall goal.

Speaking of dominant players, in reality there are only a couple of players that pose any sort of real threat to Glu at this point.  Electronic Arts comes to mind, as well as Sega and Capcom.  There are some others that may come onto scene such as Valve and Blizzard if the rumors and facts are interpreted correctly.  The good thing for Glu though is that they are the only one completely focused on this industry.  The others are vested in consoles or PC games with mobile a side project at best.  Further, Glu is the only one producing brand new franchises – everyone else is expanding their console/PC game franchises on to mobile rather than create new IP.  This could help Glu in the long run if the market begins them as making better games because their content is fresh.

Show Me the Money

Ultimately, Glu is revenue driven, like any business that wants to be around next year.  Content made exclusively for a specific platform is not as desirable as a multi-platform product to them.  This makes sense since exclusive content means that a game would be operating within a niche of a niche – not exactly the territory for record breaking sales if you follow my meaning.  That’s not to say that if the price isn’t right they might not consider making exclusive titles, but if you are a company that has handset makers and telcoms pay you to have your games pre-loaded (and this is non-exclusive, mind you), the price tag to buy exclusive Glu content for a platform is going to be quite sizable.

Glu strives to make their games fun though, so I don’t take their pursuit of revenue in the same light that I do Electronic Arts.  Personally, I think Electronic Arts lost its soul a long time ago, but Glu still has theirs – they just know they need to feed their children too.

Under The Hood

Given Glu’s fondness of 3D and destruction in games, the game engine needs to be good.  Really good.  Smartphones have limited graphic capabilities, heat dissipation is a problem, controls are not ideal, the hardware is not dedicated to gaming.  All in all, its pretty easy to see that gaming on smartphones has no shortage of issues.  A bad engine could make all these hurdles even worse.  If Glu wants to keep the gib counts high, they must have a good engine on their side.  So they found some.

Glu currently bounces between 3 different game engines: Epic’s Unreal engine, the Unity engine, and and Glu’s in-house engine.  Recently, Glu seems to be using Unity’s engine more heavily, so it seems to have won their favor.  This might be due to the fact that the Unreal engine is difficult to program for when it comes to Android.  Glu’s in-house engine has a fairly small footprint comapared to Unity which is 10 megs, so it is clearly more mobile friendly when Glu wants to create a small package.   That said, the Unity engine is far more powerful which is what Glu likes.

Having your own engine that you built from the ground up lets you understand it in ways others might not.  However, engines are expensive investments in time, labor, and resources.  Glu managed to get its engine off the ground, but as technological advances move mobile gaming forward (as it did on the PC and Consoles), the necessary complexity of game engines may make using this path less wise.  Glu knows this, which is why we don’t see them developing another in-house engine.  In addition Unity seems to be fairly versatile considering the different ways Glu has been using it in the games they’ve produced so far, so I wouldn’t be surprised if Glu stays with Unity for the time being.

The Wrap-up

The games that Glu have produced on these engines are a testament in some cases to what gaming can be on a mobile device.  The hardcore social game market is definitely in its extreme infancy right now.  I feel it will need to undergo many more growing pains and evolutions in both software and hardware before it will be genuinely accepted by those that call themselves “gamers” with pride, but these are the opening rounds we are witnessing today much like we saw back in the 1980’s with PC’s and consoles.  Who knows, maybe some day we’ll be looking back on Glu like we do Atari or Black Isle (Those are some very big shoes to fill, though).

TL;DR

Glu is focusing on 3D action games that are more hardcore than traditional social games.  They have their own game engine, but Unity is their current favorite.  They like seeing things blow up.  They like to see the gibs fly.  They also like to make money, and exclusive releases are not their cup of tea.

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  1. […] This is part 2 of a 2 part series surrounding Glu.  The original article can be found here. […]

  2. […] This article follows up on the Glu article which first touch on the “Freemium” concept.  It can be found here.  […]