Shares of Zynga (NASDAQ:ZNGA) and Glu Mobile (NASDAQ:GLUU) have gained momentum over the past few months amid impressive progress in the gaming industry.
Zynga stock shot up to a five-year high last week, while Glu stock zoomed to its highest level since 2007. Shares of Zynga and Glu are up 50% and 195% respectively over the past 12-month period.
Renewed Demand for Mobile Games
This is positive news for the investors of these companies as well as for the mobile gaming industry, which has been seeing declining demand for some time now. Mobile gaming, a hot sector when the craze for smartphones started, has been languishing partly due to the competition in the sector, the plethora of gaming apps, and the fact that gamers are constantly on the lookout for something new.
There is renewed demand for mobile games now within the gaming industry. Zynga and Glu Mobile are back in the game with titles that have managed to attract gamers and sustain their attention. Mobile gaming enthusiasts are notoriously fickle, and games have to be quite gripping to keep their continued interest. Zynga and Glu seem to have managed this trick.
Change in Strategies in the Gaming Industry
What is the magic that the two companies have come up with? There has been a distinct change in their strategies, for one. They are no longer relying on just one single popular game to keep the cash registers ringing, but on a bundle of titles. Zynga’s Words with Friends, CSR2, and Merge Dragons all have equal appeal with the gaming fans. For Glue Mobile Tap Sports Baseball, Covet Fashion, and Design Home are bringing in the bacon, so to say. Glu actually has a good pipeline of new releases in the current year, including its hit baseball franchise.
It doesn’t just stop at the games, though. Ad revenues for the gaming companies are picking up and showing momentum, a natural spinoff of the popularity and the traction in the mobile games. Zynga, in particular, has recorded robust inflows from advertising.
Things are certainly turning around for the gaming industry and for the stocks of these companies.
Will the gaming industry continue to do well? Let us know your thoughts in the comments below.
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