Gameloft recorded €95.2 million (approx. $119.97 million USD) in sales for the first half of 2012, up €18.4 million (approx. $23.19 million) from the comparable part of last year. This is the highest amount of sales Gameloft has earned yet.
In total, Gameloft raked in a net profit of €4.6 million (approx. $5.8 million), down from €5.3 million (approx. $6.68 million) last year, due in part to the expense of Gameloft’s R&D capitalization. Other moves from the company, such as restructuring its Chinese development studios, incurred some higher than usual expenses. As such, despite an increase in gross profit, the company’s expenditures brought the net profit down a bit. Despite this, Gameloft noted that it was in a “very solid financial position,” and that it had some progress this year in reducing its marketing and administration costs.
Noting its successes, Gameloft announced its “ambitious strategy” for the future:
The momentum of the smartphone and tablet market should continue to sustain Gameloft’s growth in the upcoming quarters. Gameloft invests heavily in this segment and these investments should continue to bear fruit. The company intends to launch around twenty new games targeting all audiences in the second half of 2012 including the highly anticipated Wild Blood, Gameloft’s first Unreal game, Playmobil Pirates,Littlest Petshop and Heroes of Order & Chaos. As a comparison, the company launched eleven new smartphone and tablet games in the first half of 2012.
In addition, the landmark and enduring success enjoyed by recently launched games, such as Ice Age Village, Kingdoms & Lords, The Amazing Spider-Man, Asphalt 7: Heat, and The Dark Knight Rises, should allow for solid top-line growth in the second half of the year.
Therefore, the company is now targeting €205 million (approx. $258 million) in sales for the full year of 2012, up 25% year on year. Gameloft previously targeted €200 million (approx. $252 million) in sales for 2012.
Analysis: Gameloft was an early player in the mobile market, and they’ve done a good job thus far in adapting to the rapid changes that mobile gaming has experienced. With the boom in tablets and smartphones, Gameloft’s previously modest business is skyrocketing financially, with sales on those platforms going over 50% of sales for the first time this year. Microtransactions and freemium-type games, which flourish on the tablet and smartphone markets, have also been a huge boon for the French developer.
There’s a reason that companies like EA are trying to emulate that success by making PopCap into a mobile developer. An entire market has appeared over a brand new form of consumer electronics, and every game developer in sight is trying desperately to grab a stake in this gold mine. Gameloft, which has adapted quite successfully to this new brand of mobile gaming, is one of the companies at the forefront of this new market, and it makes sense that they are now hitting record-breaking sales.
In the future, expect Gameloft to continue to record very enviable quarters and expect more companies to flood into this new market until everything finally hits an equilibrium. However, judging from the tablet adoption rate, there’s still a long way to go on this money train, and you can fully expect Gameloft to be intensifying its efforts in this area as time goes on. So what’s the lesson in all of this? If you want to make a lot of money fast, develop for smartphones and tablets.