Gameloft, one of the peer’s of our top pick G5 Entertainment, released its Q3 2012 sales update yesterday evening. On the back of a very strong development of its mobile gaming part, Gameloft achieved record revenues of EUR 55.4 million in the third quarter of 2012. Growth remained very strong in the third quarter, reaching 37%. On a constant exchange rate basis, growth for the third quarter was 33%. North America represented 32% of the company’s quarterly sales; EMEA, 26%; APAC, 22%; and LATAM, 19%.
Third-quarter sales were driven by the massive success of Gameloft games on smartphones and tablets. Gameloft’s third-quarter sales on smartphones and tablets grew by 124% year on year and represented 56% of total sales compared to only 34% in the same period in 2011.
The strong acceleration of growth enjoyed by Gameloft’s smartphone activity in the last two quarters is related to the success of the freemium and paymium models put in place by the company in March 2011. Gameloft’s number of monthly active users currently stands at 56 million and 60% of the company’s smartphone revenues derive from in-app purchases and advertising revenues.
In its outlook comments, Gameloft is very bullish, saying that the strong growth of smartphone and tablet shipments around the world should continue to sustain Gameloft’s growth in the coming quarters. In addition, the upcoming release of many new high-profile games such as Modern Combat 4: Zero Hour, Zombiewood, Heroes of Order & Chaos, My Little Pony, PLAYMOBIL Pirates, UNO™ & Friends should allow solid top-line growth in the final quarter of the year. Therefore the company now targets a little over EUR 205 million in sales for the full year of 2012, up more than 25% year on year.
The Group’s fourth-quarter sales will be published on January 29, 2013, after the market closes.
Naturally, this is a very positive read-across for G5 Entertainment. The market for mobile gaming apps is developing very well. With a strong line-up for Q4, we believe G5 is well equipped to utilize the overall market growth.