Glu Mobile Inc
Q4 2011 Earnings Call Transcript

Published: 8 Feb 2012

[Operator:]

Good afternoon. My name is Nisti and I will be your conference operator today. At this time I would like to welcome everyone to the Glu Fourth Quarter and Full Year 2011 Earnings Results Conference Call. [Operator Instructions] Thank you. Mr. Greg Cannon, Vice President of Finance, you may begin your conference, sir.

[Greg Cannon:]

Good afternoon everyone and thank you for joining us on the Glu Mobile fourth quarter and full year 2011 financial results conference call. This is Greg Cannon, VP, Finance from Glu Mobile. On the call today, we have CEO, Niccolo de Masi and CFO, Eric Ludwig. During the course of this call, we will make forward-looking statements regarding future events and the future financial performance of the company. Generally, these statements are identified by the use of the words such as expect, believe, anticipate, intend, and other words that denote future events. These forward-looking statements are subject to material risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. We caution you to consider the important risk factors that could cause actual results to differ materially from those in the forward-looking statements in the press release and in this conference call. These risk factors are described in our press release and are more fully detailed under the caption Risk Factors in the Form 10-Q filed with the Securities and Exchange Commission on November 14th, 2011. During this call, we will present both GAAP and non-GAAP financial measures. Non-GAAP measures exclude the change in deferred revenues and royalties, amortization of in-process development contracts, amortization of intangibles, stock-based compensation charges, restructuring charges, changes in the fair value of the Blammo earnout, transitional costs, and foreign currency gains and losses, primarily related to revaluation of assets and liabilities. These non-GAAP measures are not intended to be considered in isolation from, a substitute for, or superior to our GAAP results, and we encourage investors to consider all measures before making an investment decision. For complete information regarding our non-GAAP financial information, the most directly comparable GAAP measures and a quantitative reconciliation of those figures, please refer to today’s press release regarding our fourth quarter and full year results. The press release has also been furnished to the SEC as part of a Form 8-K. In addition, please note that the date of this conference call is February 7th, 2012 and any forward-looking statements that we may make today are based on assumptions that we believe to be reasonable as of this date. We undertake no obligation to update these statements as a result of future events. Lastly, this conference call is a property of Glu Mobile and any recording, reproduction or rebroadcast of this conference call without the expressed written permission of Glu is strictly prohibited. With that, I’ll turn the call over to Niccolo.

[Niccolo de Masi:]

Good afternoon and a warm welcome to everyone joining us today. Before I begin, allow me to direct you to the supplemental presentation accompanying today’s earnings. It can be accessed via our Investor website, glu.com/investors. For the first time we have included ARPDAU information on two of our largest titles. In addition to the presentation, you will find video demos of our Q1 2012 titles. I'm delighted to announce that in Q4 2011 we delivered $15 million of non-GAAP smartphone revenues. This was substantially ahead of expectations representing 340% growth from the same period last year and 42% growth quarter-on-quarter. Having crossed over and become a majority smartphone revenue business in Q2’11 I am pleased to report that our progress accelerated in Q4’11 with 75% of total non-GAAP revenues being derived from smartphones. Underpinning these strong results is holiday seasonality and extra week of Apple calendar revenue and a number of successful new title launches. Contract Killer

[Eric Ludwig:]

Great, thank you, Niccolo. I'm very pleased with the results for the fourth quarter of 2011 which were ahead of our expectations and represented a strong finish to the year. I will first provide some details on the company’s financial results for the fourth quarter as well as certain operating metrics. I will conclude by reviewing our outlook for the first quarter and full year 2012. Our financial outperformance in the fourth quarter was driven by the combination of several successful new title launches as well as continued strong performance from our existing titles. In tandem this led to 66% quarter-over-quarter growth in non-GAAP freemium smartphone revenues. Summarizing some of our key financial highlights for the fourth quarter 2011, total non-GAAP smartphone revenue of $15 million was up 340% on a year-over-year basis and exceeding our guidance range of $11.5 million to $12 million. As a result non-GAAP accounted for 75% of total non-GAAP revenues up from 59% in the prior quarter. Original IP accounted for 68% of our total non-GAAP revenues, up from 53% in the third quarter of 2011, and 26% in the fourth quarter of last year, reflecting a continuing shift to original contents. More importantly, original IP was 86% of non-GAAP smartphone revenues in the fourth quarter due to all but one title in 2011 being original IP titles. Our daily active users in the month of December 2011 were 2.9 million users while our monthly activities in December 2011 were $31.4 million. The growth in MAU and DAU is due to 44.7 million downloads of our titles on Apple, Android, and other platforms during the fourth quarter and our cumulative downloads are now at 176.1 million. Q4 non-GAAP operating expenses of 18.6 million were favorable as compared to our guidance. Our non-GAAP operating loss for the fourth quarter was $1.2 million significantly lower than our guidance of a loss of $5.7 million to $6.6 million and non-GAAP loss of $0.02 per basic share was favorable to our guidance at a loss of $0.10 or $0.12 per basic share. Lastly, we ended 2011 with $32.2 million in cash on our balance which is above our expectation of approximately $29 million. The over performance was due to our strong Q4 results. I would like to take a moment to drill down on our fourth quarter revenues and highlight how we delivered against our guidance. During the fourth quarter total non-GAAP revenue was $20.1 million which exceeded our guidance range of $16 million to $17 million and was up 29% from the same period last year. The growth was driven by the increase in non-GAAP smartphone revenues which accrued 340% year-over-year to $15 million and was above the high end guidance of $12 million. The strong year-over-year and sequential growth in smartphone revenues reflects the success of our fourth quarter releases specifically Contract Killer

[Operator:]

[Operator Instructions] Your first question comes from the line of Darren Aftahi with Northland Securities.

[Darren Aftahi:]

Hi guys, thanks for taking my questions and congratulations. Just three quick ones and then a housekeeping. I think your R&D number was $12.7 million in the quarter that tells us you are going to be the biggest cost traffic going forward. I mean how do you feel about that as a line item going forward as you grow your business. Is that something that’s going to grow dramatically or steady state, at $13 million something you can get leverage off on the revenue line. Second question on Stardom, when do you plan to launch that on Android. And then third, as it pertains to China, how much of that is baked into your guidance for Apple? Thanks.

[Eric Ludwig:]

Well, I will take the first and the third, thank you Darren Aftahi. So R&D line which was roughly $12 million this quarter, it is going to uptick small amount every quarter, getting to roughly kind of $13.25 million, $13.5 million by year end, but it’s not significant increases. This is more incremental hiring with some incremental effects for raises in cost with any adjustments. So we definitely will start to yield the leverage of the model as we mentioned by getting to adjusted EBITDA breakeven by the fourth quarter. And then China being baked in the numbers, obviously our guidance on total smart phone revenue assumes all the different channels and territories. So, not exactly specifically sure the question was, but all revenues from all regions and all channels is baked into this guidance that we just provided. Then Stardom coming on the Android, it will be coming towards the end of this first quarter.

[Darren Aftahi:]

Okay, just one follow-up, I just want to make sure because you ravel off a ton of numbers. In-app purchases in the quarter $1.25 million, is that correct?

[Eric Ludwig:]

$1,522,000 transaction.

[Darren Aftahi:]

Perfect, thanks. I appreciate it.

[Operator:]

Your next question comes from the line of Atul Bagga with Lazard Capital.

[Atul Bagga:]

Hey you guys. Thanks for taking my question and congratulations on the great quarter.

[Niccolo de Masi:]

Thanks Atul.

[Atul Bagga:]

I have a handful of questions for you guys. I think you touched upon the non-incented ad and incented ad. Is it all seasonality or is something else going on in the space now?

[Niccolo de Masi:]

You know, I put it pretty much all down to seasonality. As you can imagine pretty much every advertiser saves their bullets so to speak for the holiday season, and that’s true for publishers through to car companies. So from all we’ve seen and I'm sure you’ve kept tabs on what's going on in the press and blogosphere, ecosystems been pretty stable for the past six months otherwise.

[Atul Bagga:]

Are you seeing any more willingness by the advertisers to use mobile as a channel. I think the continual quarter-on-quarter signs that the mass of advertisers whether it’s a P&G or something else from the consumer product space, is constantly looking and probing at a scale of this ecosystem, but supply is growing quickly in the mobile space, so to push up ECPMs you need advertiser demand to grow faster than supply, and so far I think, so you get the impression that they are kind of keeping in log step at the moment.

[Atul Bagga:]

The second question I had is, there were a couple of things from Apple, not directly from Apple but what we have heard about, Apple has taken out some of the applications from app store and also there have been some things about the downloads. I just wanted to see your comments, how does that affect you guys?

[Niccolo de Masi:]

Well, net-net we obviously partner really closely with Apple, Google, Microsoft, and we believe these three companies will be the winners of the smartphone platform space, and probably over the next five plus years you’ll see those three companies make inroads far beyond mobile only. So most of our titles get featured. We support all of these companies, new technology initiatives, and as you can imagine we are only hit pains to ensure that we are following exactly the kinds of behavior that they would look for in order to get that support. So, net-net tools on any of these store fronts we are probably a beneficiary of anything that reduces the ability of clones and copycats and other types of developer behavior to put out at times products that can clutter these stores.

[Atul Bagga:]

In the past mode, I mean more specifically have any of these issues really affected your numbers?

[Niccolo de Masi:]

Well, in the [indiscernible] market place there were certainly a huge amount of piracy and cloning going on, say 12 to 18 months ago, and Google made a big effort in consultation with developers such as ourselves, to climb down on that. So a lot of the growth that you seen in Android this year came from them reducing the ability of other developers to pirate whether Glu Games and Nintendo games and bunk them up in Android market, and they’ve also been better at curetting the store. They have also added things like in-app purchase and carrier billing and all of these things in tandem have obviously led to a tremendous boost particularly in the start of the year and in the middle year in Android revenues. So, yes, I thinks it’s undeniably a helpful trend for Glu when a eco systems savor investments in original high quality content over anything else.

[Atul Bagga:]

Last question and I will get back in the queue. Japan, can you talk about what your strategy might be for Japan? Is this something which will be one of the focus area for you in 2012 or is it still… thank you.

[Niccolo de Masi:]

So Apples and the Microsoft are obviously taking their stores to every country they can, and we are going to partner closely with them in doing that. Localizing content is something that obviously we are already doing with the Chinese markets and we are going look at other markets whether it’s Japan or Korea that we think offer great lifetime values, and you are undoubtedly going to see us exposed to that growth. We haven’t yet unveiled any more specific than that but I wouldn’t rule out us working through partners where it makes sense for channels that we don’t have an on the ground presence for, for channels that we don’t think fit with the rest of the global distribution strategy. But our overall strategy is to remain integrated with publisher/developer business.

[Atul Bagga:]

This is just to clarify the announcement we heard from Mobage. I think with Mobage, are you guys partnering with them, and that’s only for the western market not for the Japanese market.

[Niccolo de Masi:]

We haven’t provided hugely more details on that tool, but you can imagine that given that we proved in the Android market place directly and the Apple market place directly these sorts of partnerships will be for channels that we don’t do a lot on. So, it’s most likely going to for Japanese carriers and that kind of thing.

[Atul Bagga:]

Okay thank you, I will get back in the queue

[Operator:]

Your next question comes from the line of Adam Krejcik from Roth Capital Partners.

[Adam Krejcik:]

Hey guys good afternoon, couple of questions first on Stardom. Just wondering if you could talk a little bit about the customer demographic for this game? How it’s monetizing compared to some of your other games developed? And kind of your vision for the lifecycle of this game and where it can progress to – I guess what are your expectations?

[Niccolo de Masi:]

This is I think by every measure the most successful casual game that Glu has developed and published. By successful I mean it’s held the highest top slot, and [indiscernible] clearly. I mean life time value in this product is significantly higher than it has been in any other casual title. You can see that when you look at the top three and top grossing charts you can see the Stardom always sits quite high up in the top grossing charts almost irrespective of where it is in the top three, and that’s because the users are highly engaged, they stick around a long time and over time they spend. So we expect this product to have similar if not better lifecycle characteristics. It will be updated the same way that we update all of our titles. Where it is an ROI we’ll make the investment. Over time you will expect and you will come to a point where as with every title this one will be better served with a derivative or follow on product and simply perennially updating the same title, but still we are looking forward to getting this to Android and potentially other platforms, and you’ve obviously seen that the Valentines update already has made a positive impact in the past week or so. So there’s good legs and I expect to still be talking about this at next quarter’s earnings call with as much details.

[Adam Krejcik:]

Okay, and how much of this game are you guys kind of banking in for your guidance? I mean is this kind of the potential upside drivers if you guys come in well ahead of your guidance again in Q1 like you did this past quarter.

[Eric Ludwig:]

Well, I mean I'm not going to talk about exactly where the upside would be, but and we have got a light release this quarter with a lot of back end components to that release slide. So really the strength of our guidance in Q1 usually coming off the catalogue of titles that we have in the fourth quarter, you’ve met titles staying in the top grossing, you can probably assume this good amount of assumption that we have are precious in nature of titles both from last year and fourth quarter driving our Q1 growth or driving the Q1 smartphone revenue.

[Adam Krejcik:]

Got it, and then this team Blammo, are they working on anything else or can you kind of give us a sense? I mean are they going to be focused on this entirely? It seems like they have a pretty good track record so far, so just trying to get a sense for – are there other projects they are working on or what?

[Niccolo de Masi:]

Well, there is clearly a wonderful core competence that’s why we were pleased to make the investment ultimately to structure an acquisition, and we are going to invest in growing that location with the core competence that this clearly established. You will see games that are mass market games that appeal to male and female pretty nicely, actually when started it was pretty nicely balanced we believe between male and female, and so I think this will be seeing more of that in future new titles as well as obviously looking at whether or not there is derivatives of things like Stardom that can be maybe reutilized some of the engine components. So there is not going to be some wearing off to have Blammo focus on trying to make Blood and Glory II or something.

[Adam Krejcik:]

Okay. And then lastly Niccolo I think you mentioned on Android you expected it to slow down over the near or midterm or maybe I missed that, just could you kind of expand on your commentary about the growth of the Android market and your guys exposure to it.

[Niccolo de Masi:]

Well, we think we are most exposed company, we think we are the leading Android freemium games company overall globally. What I said was I didn’t expect the percentage of smartphone revenues from Android to be expanding significantly in the medium term. In the long term they probably will. In the medium term what you have seen with Q4 is that Apple still is doing an outstanding job putting out record breaking smartphone shipment of 4S. If they continue to do that you are going to see the iOS continues to grow at the same rate that Android is growing. So this is really good news for Glu overall, right, because it means that both Android and iOS are keeping a good clip up as we see the year and out.

[Eric Ludwig:]

But Adam, I mean our guidance year-over-year for full year to full year was 75% in the midpoint growth in smartphone revenues, so despite the percentage not changing on the Android you could expect the Android as a percent of revenue to grow at least by 75% in absolute dollars year-over-year.

[Adam Krejcik:]

Got it. Thanks guys.

[Operator:]

Your next question comes from the line of Mark Argento with Craig Hallum Capital.

[Mark Argento:]

Good afternoon guys. Just a question around number of titles, I think you mentioned you guys published 28 games in 2011, you are hoping 20 plus in 2012. Could you fine tune that number maybe a little bit for us and just trying to get a better idea of what you are thinking about in terms of revenue per game, should it clearly pace ahead of what you are guiding the smartphone revenues at 75 plus percent at midpoint for the year. But trying to better understand kind of what you are looking at and how you are thinking about modeling or the kind of the number of games that you are going to put out. And then my second question would be you know thinking about kind of your mix of casual games versus kind of more of the action/adventure games that you’ve had success. Do you see just skewing a little bit more towards the action adventure where you’ve had the access and kind of the Hitch you had looked like most of all those were in that genre just trying to better understand fine tuning the kind of the model I'm thinking about the mix of games.

[Niccolo de Masi:]

Okay. So we said last quarter that we expected about 75% of titles to be in the action/adventure space and that’s still where we are. We do have obviously one or two good casual teams, but out of Glu’s total 20 plus teams the vast majority clearly have action/adventure affinity and we want to build on that. In building on that you are going to see us support not only titles that have gone out late last year, and that’s the Q4 successes, you see us supporting those through this year, but you also investing in bigger follow on and derivative products as well as bigger, higher quality action/adventure titles in the second half of this year that are new. If you look at that kind of those statements and submission you can garner that we have a fixed number of teams, some of them supporting Q4 successes, some of them are going to roll off 2011 products and reload to build another title. But if we are trying to up the bar with production values over time we expect revenue per title to grow, but we always said that we were going to put out fewer and fewer titles the more successful we get, because teams will get more consumed supporting big user bases and big revenues. We also realize that there is an advantage to Glu in making investments for longer going bigger with higher production values or titles, because it cuts through that clutter and it’s an absolute differentiator. So that will be the philosophy that we carry through the rest of 2012. You know build on the success and the flaws of 2011, obviously invest in the new found success, Blammo Games in casual, but there is not going to be a departure from those sorts of philosophies in the next 12 months.

[Mark Argento:]

How many games did you have that were active I guess at the end of the year?

[Eric Ludwig:]

Active, the titles that Niccolo and I talked about, we launched four various successful titles in Q4, and we had five other persistent titles. All nine of those titles were active in the sense that we had development teams still continuing to add content and provide updates. So that would be probably a real active title definition. The other titles are still generating revenue, even the Men versus Machines, and other titles have, the team has moved on. There is still – those are still live titles that are still generating revenues though at a much less meaningful click.

[Mark Argento:]

Once you have Griptonite fully up and going in terms of production how many total teams you guys have?

[Niccolo de Masi:]

Well, we always said the Griptonite has got about 10 or 11, and we had about 10 or 11 at Glu prior to these acquisitions. So, you should think of the whole company as 22, 23 something like that.

[Mark Argento:]

All right. And then, any major change, I know it sounds like – with the success or at least initial success you’ve had with the Blammo guys around Stardom, hopefully reloading a couple of titles behind that. From a talent perspective, are you comfortable with where you are now in terms of that DNA or are you, you know, could we see you guys make some more acquisitions out there in the mobile space in terms of some casual gaming talent.

[Niccolo de Masi:]

We are pretty comfortable with the approximate 600 people we have now. We feel we have got enough location with talent pool that we can grow each of them organically. There is a continual pruning exercise every quarter, growing teams, shrinking teams, growing location, shrinking locations, subject to success. So we never think we have reached the finishing line with regards to improved ability of talent base, talent teams, studio locations, and of course driving those synergies between all of these teams and locations, which we are spending – we’ve always invested in, we’ve always run a Glu university program that gets those synergies driven out for the past year or two, but we are getting better at this. I mean we are getting better at everything Mark. So, I think you are going to see us slowly but surely continue to grow not only the size of the operation, but the quality quarter-on-quarter here at Glu.

[Mark Argento:]

Then last question. Eric, I know you had mentioned that in the quarter that there was an adjustment for the way you guys were recognized in some deferred revenue. I just wanted to see if you could give me a two liner on that to better understand it.

[Eric Ludwig:]

Yeah. So, in the fourth quarter we were finding a policy on virtual currency. Previously we were recognizing over three months and we have added an incremental deferral of 15 days to go to a mid quarter convention versus a beginning of quarter convention for each of the months of revenue.

[Mark Argento:]

Great. Thanks guys.

[Operator:]

Your next question comes from the line of Scott Searle with B. Riley & Company.

[Scott Searle:]

Good afternoon. Thanks for taking my questions. Eric, I apologize if you covered this earlier, but did you give a number for China in terms of your feature phone revenue, and also in terms of the dollars per the average micro transaction during the quarter.

[Eric Ludwig:]

The first one you are talking about is $5.79 down from $6.40 the prior quarter and the number of in-app purchase billable transactions went up to $1,522,000. So, overall, revenue grew significantly in in-app purchasing. Slight mix shift down in terms of pricing. That was just due to more programs that we ran. Then China we did not break our feature phone. Our feature business is now only 25% of the total revenue, and in terms of overall revenue feature phone legacy China is a very small number.

[Scott Searle:]

Got you, and then just in terms of monetization of the different platforms you indicated that Android was doing very well. I'm not sure if you gave any numbers on that front. I was wondering Niccolo if you could provide a little bit more color just in terms of how that’s monetizing versus iOS. And may be also give us some idea how tablets are monetizing versus smartphones right now to give us some sort of an idea of how that’s progressing.

[Niccolo de Masi:]

Well, we break out the percentage of total smart phone revenues that come from Android and we said that was approximately 30% for the quarter of the $15 million, and that’s across all Android. So you know the Android market that Google operates is the largest and most successful channel for Android games by a long margin. But there are other places. I mean carrier stores are allowing Android content, there is a couple of third party providers. Amazon of course has their own store and their own device, and there is numerous other channels that we take advantage of once we’ve made an Android title. We’ve seen that overall on a per user basis nothing has matched or surpassed the average revenue per user that iOS generates and that’s true for both phones and tablets. Generally speaking, we believe that tablet users are probably the kind of demographic and the kind of device that will generate more annual revenue per user than you will find on something with a smaller foam factor. But we don’t have particularly, I would say tight statistics on how tablet users compare by manufacturer for Android or how they compare from things like the Amazon Kindle Fire versus an iOS tablet. We just know that they are significant and they are not cannibalizing phones which is really good news for Glu. Because mobile devices are cannibalizing non-mobile devices as entertainment medium, and all of that benefits Glu in terms of overall aggregate gaming ecosystem. Over time I expect it to reach parity, so I would expect – I don’t know if it’s in a year or two years, but the fact that Android market place is using carrier billing means that I think as emerging markets gravitate towards Android phones and they are able to transact and pay for goods without a credit card you are going to see that the average revenue, and certainly total revenue from Android will catch up to iOS. That’s all very good news for Glu because we are uniquely able to make our content work on hundreds of Android devices very, very efficiently. We are long term builds on anything Android. That’s for sure.

[Scott Searle:]

And lastly, in terms of the new title slate, did you give approximate dates about when we should see some of the new titles hitting in, and also just Eric in term of R&D bumping up a little bit as we go forward here, is that related to increasing cost per title or is it really just a little bit more aggressive in terms of the number of titles you would expect in the current quarter but really gearing up over the course of 2012.

[Eric Ludwig:]

Yeah, sure Scott, thanks for the questions. In terms of the title releases we just released Rouge Racing about a week ago. So that is the first of the five titles in the second and first quarter and the other titles will be coming out king of between now and middle to end of March so, at the end of March they work backwards, the other titles will be releasing kind of backwards from there to mid February. And then in terms of R&D the small uptick in R&D kind of quarter to quarter to quarter, there are still some continual hiring that we have, one to round out some of the current dev teams. And then towards the end of the year, we do have some additional development teams that we’re adding on board on some location. So part of it is filling in the teams, another part is adding a couple of teams in the back half of the year. And then just a classic April race is that we have for employees globally, so there is some uptick from that as well.

[Scott Searle:]

Thanks, nice quarter.

[Eric Ludwig:]

Thanks Scott.

[Operator:]

Your next question comes from the line of Dan Cheney [ph] with Morgan Keegan.

[Unidentified Analyst:]

Hi, guys thanks for taking my question. This is [indiscernible]. Just wondered if you could go over again your dial and mail metrics for Q4 and then talk about what you see for them over the next year?

[Eric Ludwig:]

Yes, thanks for the call. Yes, we have 2.9 million daily activities in the month of December, 31.4 million monthly activity in the month of December, both of those were up nicely quarter to quarter. Downloads in the fourth quarter 2011, we had 44.7 million downloads of our titles on Apple, Android, and other platforms for our year ending cumulative of 176.1 million. In terms of what that trend looks like quarter to quarter, year-over-year in the forecast, we don’t really provide forecast on what that is just given it is dependent upon title release dates and times except the title themselves, monetization of titles, so titles are starting to monetize better, so you can have a different revenue factor with different titles. So we’re not trying to give guidance on those metrics.

[Unidentified Analyst:]

Okay, thanks you.

[Operator:]

[Operator Instructions] You have a follow-up question from the line of Atul Bagga with Lazard Capital.

[Atul Bagga:]

Hi guys, thanks for taking my call again. I was wondering, you talked about your total number of installs 176, can you just share with us what the total number or unique UDIDs that you have?

[Eric Ludwig:]

Yes, that's something that we are breaking out right now.

[Atul Bagga:]

Okay, fair enough. And then I think on tablets, any kind of tablets iPad, Android or Kindle, can you talk about what percentage of revenue is coming from tablets versus smartphones now, and what’s the growth trajectory on tablets versus smartphones?

[Eric Ludwig:]

Yes, so we’re also breaking that out though I think the metrics out there almost Apple and the Android, I think the Apple iPads are 15ish to 20ish percent of the overall installed base. Those devices do monetize better, so whatever that install base would be certainly on iOS, you can expect the number in terms of revenue would be that number or above in terms of percentage of revenues. They do monetize better. But we don’t have – we’re not providing any more granularity on that metric.

[Atul Bagga:]

Okay, and the last one, you mentioned for 2012 you can expect to see 20 plus games, can you talk about what percentage of these games would be coming from your own studio versus Blammo versus Griptonite? Thank you.

[Eric Ludwig:]

Yes, sure. Thanks as well. So yes, we’ve said 20 plus games. What we have said publicly Griptonite, there will be at least 11 games coming from Griptonite from these 10 to 11 teams that Niccolo mentioned. Blammo we’ve said had started in Q4 this past year, there was an additional title coming in the second quarter from Blammo, and most likely an incremental title towards the second half of the year. That’s really what we’ve said publicly about the acquisitions and the number of titles coming from them. As Niccolo mentioned depending on upon how successful the other launches are if the titles persists and the teams persists you may have the smaller number of titles launched in for the rest of the year, just given the successful titles have persistence in them.

[Atul Bagga:]

Just so I understand this, can you talk about a little bit about let's say title can Contract Killer, in terms of when the title was in development stage what was the team size and now what might be the team size for that title?

[Eric Ludwig:]

Yes, so that title Contract Killer, the original that was launched at the end of March 2011 had about a 10 to 12 person development team, about six to seven month development cycle, and that title today still has about the same team size roughly dedicated to it.

[Atul Bagga:]

Perfect, thank you so much.

[Eric Ludwig:]

Thanks Atul.

[Operator:]

You have a follow-up question from the line of Darren Aftahi with Northland Securities.

[Eric Ludwig:]

Hi Darren.

[Darren Aftahi:]

Hi Eric, hypothetically if Apple was to introduce device for the living room like a television, can you talk a little bit about timeframes and incremental costs to port your current applications to a larger screen? Thanks.

[Niccolo de Masi:]

Sure. The good news for Glu is that we already invest in big canvas sizes and high resolution art for all of our Q4 2011 titles onwards. So games like Blood & Glory and Frontline Commando, it would also not only hypothetically work well if Apple introduced something for a living room, but it would work well if taken in places like the Mac store which has even bigger screens than tablets. So, we are thinking of course about long-term futures where Apple, Google, Microsoft, as I said in earlier questions, do play a bigger role in gaming generally and it’s not just on the phone, I think PCs and living room. I think all three of these companies over the next five plus years have to have a convert strategy, and so will by the way other companies like Sony and Samsung, all five of these can stitch together call it a quadruple play of tablets and phones and laptops in living room. Good news for Glu is, I expect all of these players to want to run semi-curated or curated store front experiences. So, the kinds of relationships we have, the way we work, the kinds of games we build, showing off the hardware this whole philosophy is going to stand us good stead with all five of these companies over the next few years.

[Darren Aftahi:]

Great, thank you

[Operator:]

At this time there are no further questions. Gentlemen, are there any closing remarks.

[Niccolo de Masi:]

Okay. Well, we thank you all for attending. We would also like to thank my colleagues and our shareholders for the support, as we continue to build momentum we become the world’s leading freemium mobile gaming company. Thank you again for joining the call and we’ll speak to you next quarter.

[Eric Ludwig:]

Thanks a lot.’

[Operator:]

This concludes today’s Glu fourth quarter and full year 2011 earnings results conference call. You may now disconnect.