In order to focus on its biggest games, Kabam has sold off its classic mobile games and third-party publishing business to Chinese game firm Gaea Mobile for an undisclosed price.
The change is a big deal for Kabam, which has decided to double down on high-profit, big-name titles such as Marvel Contest of Champions. That title is the company’s current flagship. It has growing momentum, and it is about to be published through a joint partnership in China.
But it carries some risks, as Kabam will concentrate its attention, resources, and business expectations on just a handful of titles. It is selling off mobile titles that include Kingdoms of Camelot, The Hobbit: Kingdoms of Middle-earth, and Dragons of Atlantis. All three of those franchises have generated more than $100 million each for Kabam.
Kent Wakeford, chief operating officer of San Francisco-based Kabam, said in an exclusive interview with GamesBeat that the deal is closed, and it reflects acontinuing evolution of Kabam’s strategy to focus its resources on the biggest opportunities.
“Gaea is buying our legacy first-generation mobile games and publishing business,” Wakeford said. “This is a continuation of our strategy of fewer, bigger, bolder games. The market will continue to get bigger for the top mobile games.”
Wakeford said the early mobile games “are first-generation mobile” titles that represent a distraction for both management and development teams. By selling these titles off, as well as a third-party publishing business, Kabam can focus its development teams around big new games.
Kabam is keeping titles such as Marvel Contest of Champions, Fast & Furious: Legacy, Star Wars: Uprising, and Spirit Lords.
Beijing-based Gaea Mobile was founded in September 2014 as a mobile game company; it has hits such as Ace of Arenas, which has had 30 million downloads.
By mid-2016 Kabam will transfer to Gaea operational responsibility for several high-profile titles, including Kingdoms of Camelot: Battle for the North, The Hobbit: Kingdoms of Middle-earth, Dragons of Atlantis: Heirs of the Dragon, and a number of games in Kabam’s third-party publishing business.
Kabam and Gaea expect no changes in player accounts or progress, and they say the transfer will be seamless.
Wakeford said that Kabam also will continue to develop new original games and games based on some of the world’s most popular movie franchises.
“Gaea Mobile’s transaction with Kabam is an essential piece in our ‘global development, global publishing’ strategy blueprint”, said Glevis Yang, Gaea’s chief operating officer, in a statement. “We are continuously in search of international games and talents to become part of our expertise in creating games that can be enjoyed by gamers of different nationalities and cultural backgrounds. We look forward to bringing exciting new titles to the gaming community.”
Kabam started as a developer of strategy games on Facebook in September 2009, and it expanded into mobile in 2011. Eventually, it sold off its Facebook games such as Kingdoms of Camelot and Dragons of Atlantis to RockYou.
Kabam introduced its focus on developing fewer, bigger, and bolder games in April 2015 when CEO Kevin Chou announced a global restructuring. The move is consistent with the way other game companies are approaching mobile, where there are too many “me-too” titles. By contrast, Supercell has become one of the biggest revenue generators in mobile gaming with just four games on the market.
“From a management perspective, we don’t want to split our focus,” Wakeford said. “We don’t think that is the way to really succeed. We want to put the smartest people on the biggest opportunities. Supercell is a great example. It’s about being able to create franchises that last years and years.”
The fighting game Marvel Contest of Champions exemplifies the evolution of the company’s strategy to focus on global hits. The game surpassed $100 million in revenue in seven months and continues to grow in popularity.
Wakeford said it remains to be seen how many Kabam employees will transfer to Gaea. Kabam currently has about 800 people.