In a rhetorical style best described as “rich know-it-all,” Glu Mobile CEO Niccolo de Masi sat down with Recode executive editor Kara Swisher to discuss his strategy for mobile games. His company was behind the successful Kim Kardashian: Hollywood, as well as a game for Katy Perry and two still in development from Britney Spears and Nicki Minaj. In no uncertain terms — and this may not exactly be a shock — de Masi has outsize ambitions for the music business’ relationship to his industry. “If you’re a musician today — live performance, really important income stream. Merchandising, big income stream. I want gaming to be third.”
de Masi explains, echoing a common refrain from the tech investment space, that he moved into mobile games after trying to enter the digital music business early on. “I was working in the mobile music space… I ran a public company in the UK in the music space 10 years ago — I got into the games business because I recognized, when the iPhone was announced in ’07, that there probably wouldn’t be any margin left, for someone like me, who was trying to make a profit off sitting between labels and carriers. There’s always another performing rights organization going for another percent.”
Wisely (considering his company’s current market capitalization of $330.6 million) de Masi recognized that he would be at the mercy of the major rights holders and set out to “own much more of the value chain” through original intellectual property that Glu would develop, like Deer Hunter (which is exactly what it sounds like). Perpendicular to that strategy? The company’s celebrity-endorsed games, “The celebrity games are the exception to the rule — an exception that we’re willing to make because.. [those celebrities] have this tremendous social base that is built-in promotion.” App Annie, an online database of app rankings, shows that Kim Kardashian: Hollywood was ranked the 239th most-popular app — not games, but of all apps — this past Sunday, while Katy Perry: Pop reached 270th. (Keep in mind all the new devices that were unboxed and obsessed over this past weekend.)
As revenues from the actual music that musicians create continues to dwindle, revenue streams like games licensing is more important than ever. Even the biggest record label in the world, Universal Music Group, is diversifying well outside of its comfort zone, finding early success with films like Amy and Straight Outta Compton. Stars with brands that loom large culturally are well-positioned within the new paradigm. As de Masi points out while explaining his strategy: “What you find when you look at the most popular people in the world — women are much more adept at building and maintaining large social followings than men… the top ten, twenty most-popular, most-followed people in the world are women. And they tend to be musicians.”
To listen to the full conversation, head over to Recode.