Glu Mobile Inc. (GLUU), Electronic Arts Inc. (EA), NetEase, Inc (ADR) (NTES): Is a Turnaround in the Cards for This Mobile Gaming Company?

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It won’t be easy

Mobile gaming is a tough arena to compete in and the presence of bigger and more established players will make things difficult for Glu. For instance, game publisher Electronic Arts Inc. (NASDAQ:EA) is aggressively moving into mobile gaming. The company is of the opinion that game play on mobile in the future will be at par  with the present console generation.

Electronic Arts Inc. (NASDAQ:EA) is looking to make the most out of mobile gaming and will be launching an impressive 15 mobile games in the next year — redesigned for mobile as against just porting to smaller screens from PCs and consoles. Given the brand recognition of Electronic Arts Inc. (NASDAQ:EA) and the popularity of its games, Glu Mobile Inc. (NASDAQ:GLUU) will face stiff competition.

Then there’s the threat of Chinese gaming companies, such as NetEase, Inc (ADR) (NASDAQ:NTES), bringing over popular online games to mobile. NetEase, Inc (ADR) (NASDAQ:NTES) recently launched the mobile version of its popular game Fantasy Westward Journey II and it has a lot more in the pipeline . The advantage that NetEase, Inc (ADR) (NASDAQ:NTES) enjoys in the lucrative Chinese gaming market is that it can use the popularity of its web games to bring users to mobile.

Moreover, NetEase, Inc (ADR) (NASDAQ:NTES) is more than 50 times bigger than Glu, and as such, its marketing muscle is undoubtedly superior. Given the presence of these resourceful and more established peers, investors shouldn’t be taking Glu’s promises of a turnaround at face value.

The takeaway

It looks like Glu Mobile Inc. (NASDAQ:GLUU) would finally be releasing some games and is also promising revenue growth in the fourth quarter. Moreover, the company seems to have put its adventure into gambling on the sidelines and is focusing on mobile, which is probably the right thing to do as that’s where Glu specializes. Once Glu delivers what it is promising, then it might be worth another look.

The article Is a Turnaround in the Cards for This Mobile Gaming Company? originally appeared on Fool.com and is written by Harsh Chauhan.

Harsh Chauhan has no position in any stocks mentioned. The Motley Fool recommends NetEase.com.

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