As Glu’s Stock Price Soars, Its Crowdstar Acquisition Looks Prescient

The acquisition of Crowdstar by mobile game developer Glu in late 2016 serves as a primary driver for the company’s subsequent financial turnaround and stock market performance. Initially viewed as a modest addition to the portfolio, the $50 million purchase of the developer behind Covet Fashion and Design Home proved to be a strategic turning point. By integrating Crowdstar’s female-focused titles with Glu’s established publishing and user acquisition infrastructure, the company successfully diversified its revenue streams and reduced its historical reliance on single-hit titles.

Financial data from 2018 highlights the efficacy of this strategy. Between November 2016 and August 2018, Glu’s stock price increased by nearly 300%, rising from $1.91 to $7.57. By the second quarter of 2018, the two Crowdstar-developed titles accounted for more than 50% of the company’s total revenue. This growth occurred alongside a broader corporate restructuring, which included the closure of underperforming studios in Long Beach, Portland, and Moscow to streamline operations.

While Glu continued to report net losses during this period, the company demonstrated a clear trend of stabilizing its financial position while simultaneously growing top-line revenue. Specifically, second-quarter results from 2018 showed a loss of $4.4 million on $90.2 million in revenue, a significant improvement over the $23.6 million loss on $68.7 million in revenue recorded during the same period in 2017. This trajectory supports the company's stated goal of achieving profitability by 2019, illustrating how targeted acquisitions can fundamentally alter the commercial trajectory of firms within the mobile gaming industry.