How to Play the Mobile Gaming Industry

In today's video, I look at Glu Mobile (NAS: GLUU) and explain why I'm giving the stock an outperform rating on my profile in Motley Fool CAPS. The company, which develops games for mobile devices and tablets, is well positioned within the global "freemium" space -- a market that is on track to hit $16 billion by 2016. In its latest quarter, Glu Mobile reported 192% revenue growth year-over-year due to smartphones.

Another upside is that unlike rival game maker Zynga (NAS: ZNGA) , Glu doesn't depend on Facebook (NAS: FB) for revenue. Last year, Zynga accounted for 15% of Facebook's revenue in its first quarter. While that's a sizable amount, it is down from 19% in the prior period. Because Zynga currently relies on Facebook for user growth, it doesn't have the same appeal as Glu. Zynga's stock has lost more than 33% of its value year to date. Meanwhile, shares of Glu have soared nearly 48% this year. Looking ahead, I think Glu Mobile still has room to run, despite its upbeat performance to date.

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At the time thisarticle was published Fool contributor Tamara Rutter owns shares of Zynga. Follow her onTwitterusing the handle@TamaraRutterfor weekly stock picks and other Foolish insights. The Motley Fool owns shares of Facebook. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free.

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