Glu Mobile (NASDAQ: GLUU) is an interesting small-cap in the world of free video games for cellphones. It’s actually a high-growth business — a growth not different from what we witnessed in Activision Blizzard‘s(NASDAQ: ATVI) acquisition of King Entertainment, maker of Candy Crush Saga, for $5.9 billion.
How do mobile companies make money when the games are free to play? Companies like Glu are adept at creating addictive games that are fun. You are encouraged in various ways to drop a dime and buy additional powers, unlock a new weapon, or purchase a beloved character. I am currently addicted to Disney Sorcerer’s Arena, my favorite Glu game by far. I suspect I will never get Donald Duck unless I pay a little money. I might have to, I really like that angry duck.