US-based freemium game developer and publisher Glu Mobile will expand its operations in Asia, but expects a tough Q3 resulting in an increased loss.

The company plans to grow its first- and third-party publishing efforts in Japan and South Korea by bringing in local expertise.

Glu recently opened an office in Seoul, which games veteran Jay Kim has been appointed to lead. Shinsuke Mori, who previously worked at Japanese mobile social gaming player Gree, will lead efforts in Tokyo.

“We anticipate that their deep knowledge of the Japanese and Korean gaming markets will strengthen our first and third party growth. Glu remains focused on forging new relationships in Asia while continuing to bring great content to more gamers across the region,” said Glu Mobile president of publishing, Chris Akhaven.

Glu’s non-GAAP smartphone revenue in the Asia Pacific region has grown 32 per cent year-on-year, fuelled by the success of its own titles such as Eternity Warrior II and Frontline Commando: D-Day.

The company also entered distribution agreements with South Korean mobile platforms Kakao and SK Planet, during the second quarter.

The third-party publishing business, which was announced in February, is on track to launch six titles in 2013, and at least 12 in 2014. As well as publishing proven titles, the division is looking to incubate games still in development.

Glu reported consolidated revenue for the three months ending on 30 June of $24.4 million, down from $29.3 million a year ago. But it reported a slightly lower net loss of $2.92 million compared to $2.99 million in Q2 2012.

Non-GAAP revenue for the second quarter was $23.2 million while the non-GAAP net loss was $3.8 million. The company forecast that for the third quarter it would record non-GAAP revenue of $19.6 million and $21.0 million and non-GAAP net loss of between $6.8 million and $7.7 million.

Niccolo de Masi, Glu’s CEO, was bullish though, saying that the combination of improving monetisation and retention and traction with third-party publishing positions the company to return to growth in Q4.