NQ Mobile Inc.’s (NQ) subsidiary, FL Mobile, will exclusively offer the Andriod version of Ubisoft’s Rabbids Big Bang in China, per an agreement inked between the two companies.
Rabbids Big Bang is a physics-based mobile game that enables players to pilot Rabbids in space and complete certain missions. The game is also available for Apple’s iOS platform, which has a Metacritic rating of 62.
Leveraging the current partnership with Ubisoft, FL Mobile will strengthen its position as a mobile game publisher and platform provider in the surging China Mobile gaming market. iResearch, a research firm that focuses on China’s Internet industry, reported that in the third quarter of 2013 revenues from mobile games increased 75% compared to the previous year. The firm also forecasts that the revenues will surge in the forthcoming quarters as well.
Moreover, the current partnership will help Ubisoft to market other games using FL Mobile’s huge registered user base of approximately 98 million. FL Mobile also has 19 million monthly active users.
It is worth noting that NQ Mobile reported an increase in mobile game revenues due to better-than-expected user growth of FL Mobile’s gaming platform and new game launches during the last reported quarter. The company distributed 22 iOS games and 52 Android-based games.
Thus, we believe that NQ Mobile’s exclusive agreement with Ubisoft bodes well for its future prospects in China. However, the surge in demand for mobile games in China has prompted other game publishers such as EA’s (EA) PopCap Games to increase focus on the country. Moreover, competition from other domestic game publishers is a concern.
Currently, NQ Mobile has a Zacks Rank #3 (Hold). Investors can also consider other better-ranked stocks, such as Broadridge Financial (BR) and Cirrus Logic (CRUS), both of which sport a Zacks Rank #1 (Strong Buy).