Back in 2012, the New York Post crowned Kim Kardashian the second most hated person in America, smack dab in between Casey Anthony and Jerry Sandusky. According to the list, Kardashian was more hated than Bernie Madoff, John Edwards, and O.J. Simpson, among many other disgraced people.
However, the app store tells a totally different story. Kim Kardashian: Hollywood is a free video game from the app store that allows players to design their own character, become Kim Kardashian’s assistant, and gain wealth and fame by attending red carpet events, dating other celebrities, and hanging out with Kim. The game is interactive, empowering gamers to make decisions and accomplish specific tasks.
Available on Apple's (AAPL) iOS and Google's (GOOG) Android devices, the Kim Kardashian game has been a booming success. The app is currently the fifth highest-grossing game on the app store and was once the second-most downloaded game on the web. Based on over 200,000 reviews, users have given the game a 4-star rating – not bad for a game endorsed by one of the most hated people on earth.
Kim Kardashian stands to make a fortune from the game’s success. According to TMZ, Kardashian has the rights to 45% of the profits, which could earn her over $85 million this year alone. That’s the equivalent of about three years of her income.
Kardashian, however, isn’t the only one benefitting. Glu Mobile (GLUU) makes, markets, and sells the game. Kim Kardashian: Hollywood has become the company’s signature game, much like Zynga’s (ZNGA) Farmville and King Digital Entertainment’s (KING) Candy Crush.
The stock has been a roller coaster ride ever since the app launched. Does Glu’s signature game have staying power in the market or is the Kardashian game just another fashion trend?
Mobile Fad or Fortune?
Glu’s CEO Niccolo de Masi definitely thinks Kim Kardashian: Hollywood is here to stay. “This is the first game of its type that’s ever been top-five rated. It’s innovative. It’s the best-rated game in the store. 60,000 five-star reviews,” raved de Masi during a CNBC interview. “The reality is, I think it’s gonna go years.”
Of course, de Masi is the CEO and it’s his job to believe in the product. It’s hard for most people to envision that the Kim Kardashian game has real staying power in an intensely competitive gaming market.
This was made even more evident when Glu announced conservative guidance during its previous quarter, presumably because it expects the Kim Kardashian game’s popularity to decline. The stock doubled from June 10 to July 21 as the Kardashian game blew up, but has since declined 25% over the past week as investors realized the improbability of the game becoming a multi-year hit like Farmville, Candy Crush, or Clash of Clans.
However, that’s not to say that Glu will be right back where it started when the game inevitably fades into irrelevance. Kim Kardashian: Hollywood is actually backed by a creative business model that Glu can replicate in other capacities.
Why Glu Has Staying Power
The Kardashian game is a free download, but that’s not stopping Glu from making millions. Users can spend real money to buy “K-Stars,” which can be used to buy the character new clothes, complete challenges, perform specific actions, or climb the celebrity ladder.
Things cost more K-Stars at higher levels, so buying K-Stars makes the game much easier. The K-Stars cost $5 for 50 and sell for increments up to $100 for 1,250. By selling these K-Stars, the game grosses around $700,000 per day and de Masi estimates that the game will gross around $200 million in its first year.
A lot of this is due to the fact that Kim Kardashian is highly involved in the game’s operations. As a stakeholder, she has a vested interest in the success of the game. Kardashian and de Masi email once or twice daily and the two speak on the phone once or twice per week, de Masi said during the CNBC interview. Kim’s Instagram profile picture is also her game image.
The Kim Kardashian game may not stay popular for years to come – it may even be dead a couple months from now – but Glu is nonetheless on to something. Celebrity-reality games are somewhat uncharted territory, especially with the celebrity as a stakeholder and primary endorser. Who knows, maybe Glu plans to introduce new characters into the Kardashian game or develop entirely new games based on other celebrities in a similar platform.
This type of game could be a new trend in the mobile gaming marketplace or could be a fad set for demise in the coming months. Those who believe in Glu’s business model now have a chance to pick up shares on a pullback, as the stock is down 33% from all-time highs.
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