Is There Life After Kim Kardashian for Glu Mobile?

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Shares of Glu Mobile (GLUU) opened sharply lower on Thursday after it reported disappointing quarterly results. The mobile gaming company that raced into market fancy this summer as its "Kim Kardashian: Hollywood" game raced up the mobile apps charts is now going the other way.

%VIRTUAL-WSSCourseInline-963%It seems like a monster quarter at first glance. Adjusted revenue soared 270 percent to $83.6 million when pitted against last year's third quarter, fueled largely by the success of the Kardashian celebrity simulator, in which players create a character that rubs elbows with the rich and famous as they plot their way to stardom in an interactive adventure. Glu's adjusted profit clocked in at 17 cents a share, well ahead of the 11 cents a share that analysts were targeting. Glu had posted a quarterly loss a year earlier. Glu also boosted its guidance higher for all of 2014 in Wednesday night's report.

This is often the recipe for a surging stock, but Glu took a hit because analysts were holding out for more than a 270 percent pop on the top line. Wall Street was banking on $85.2 million in revenue. As for that improved outlook for this year -- with Glu now eyeing between $225.5 million and $230.5 million in revenue in 2014 -- analysts were modeling $232.6 million on the top line.

Glu may be in a better place than it was three months ago, but the market overshot on the potential of a single hot franchise.

Rubber Meets Glu

Glu Mobile has been one of this year's most volatile stocks. It began the year at $3.88, rarely mentioned in the same circles as casual-gaming leaders King Digital (KING) and Zynga (ZNGA). However, the stock had doubled by this summer when Kardashian's game took the mobile gaming market by storm. In a stunning run this summer, Glu shares posted four consecutive weeks of double-digit percentage gains, soaring with weekly pops of 19 percent, 13 percent, 14 percent and 13 percent.

It's been all downhill after that. As soon as Kardashian's game began to slip from the top of the charts, investors began to head for the exits. They had seen this before. Zynga tumbled after bookings peaked in 2012. King Digital slumped after "Candy Crush Saga" began declining in popularity earlier this year.

Why did investors think it would be any different this time? Glu is trying. It offered its first substantial update to the Kardashian game a few weeks ago. It also locked up Kardashian with a three-year contract, just in case it's still a relevant franchise in this very fickle market.

The game is at No. 17 among the top-grossing apps on Google (GOOG) Play. The problem is that ranking that low is practically a death sentence in the cutthroat world of mobile. After all, King Digital has five of the 11 highest-grossing apps on Google Play, and its stock has shed half of its value since peaking in July.

Mrs. West Goes South

Glu is hoping that it can land another hit in case Kardashian's popularity has peaked. Its games don't all fade right away. "Deer Hunter" is still among the 100 highest-grossing games even though it's been out for more than a year. This year's release of "Dino Hunter: Deadly Shores" was greeted to 1.5 million downloads in a single day -- a Glu record.

It's not giving up on Kardashian, of course. The game continues to account for the lion's share of Glu's revenue at the moment. However, if King or Zynga taught us anything, it's that staying on top isn't easy, especially when you have a lot riding on a single hit title.

Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days.To read about our favorite high-yielding dividend stocks for any investor, check outour free report.