SAN FRANCISCO--(BUSINESS WIRE)--Kabam, Inc. today announced 2014 revenue of $400 million, a record for the closely-held free-to-play mobile games company. This marks the fifth consecutive year of growth for Kabam, which has been profitable since 2012 and is now over ten times larger than it was four years ago.
“While we achieved another record, Kabam’s 2014 revenue was not consistent with our initial forecast,” said Co-Founder and CEO Kevin Chou. “One of our newer divisions underperformed and we intentionally dialed down other revenue-generating opportunities to better position Kabam for the long term.
“We made 2014 a transformational year by rebuilding our Studios leadership team, delaying some games and tightening our focus on high performing games. As always, we take the long-term view to ensure satisfied customers, sustainable growth and a slate of new games that will lead the market,” Chou said.
“These bold transformational initiatives put Kabam in a stronger competitive position for sustained leadership and growth into the future,” Chou said.
The transformation of Kabam includes:
- Restructuring Kabam Studios and hiring a whole new leadership team, including President Nick Earl, Senior Vice President Aaron Loeb and, in early January, Senior Vice President Mike Verdu through the acquisition of his company, TapZen
- Tightening focus on fewer games run by the third party publishing division, which fell significantly short of its revenue forecast
- Delaying the launch of Marvel Contest of Champions to perfect the game, which resulted in Apple naming the game Editors’ Choice in 143 Countries on iPhone and 121 Countries on iPad
- Delaying the sequel to the enormously popular Fast & Furious 6: The Game until early 2015
- Easing monetization requirements on several games to generate greater long-term customer loyalty
- Revamping Kabam Customer Service to be more interactive with customers
- Adding senior executives for Platform, HR and Marketing
- Divesting the company’s legacy Web games to focus development resources exclusively on games for mobile devices
Third Party Publishing
Kabam is tightening its focus on fewer games run by its third party publishing group.
“We have enjoyed some good successes with publishing, but not at the volume we planned. We look forward to continuing our relationship with our key third party developer partners as we concentrate our resources on publishing the industry’s best AAA console-quality games for mobile devices,” Chou said.
New Investment in Kabam
In August 2014, Kabam announced a world-class partnership with Chinese e-commerce giant, Alibaba, which invested $120 million in the company and raised the company’s valuation to more than $1 billion.
Console-Quality Mobile Games
Kabam introduced a truly AAA console-quality game for mobile devices in 2014 with the launch of the hit Marvel Contest of Champions, which has been downloaded more than 17 million times since its introduction. Kabam delayed the game until December of last year to perfect the visually stunning graphics and gameplay. Marvel Contest of Champions provides a preview of the AAA fidelity on mobile devices players will now expect from upcoming Kabam games.
Financial Commentary
“Kabam is well positioned to deliver sustained profitability and growth,” said Chief Financial Officer Steve Klei. “Our revenue base allows a level of investment to create great games that few companies in the world can match. Additionally, our enviable status as a private company enables us to reinvest revenue so we can maximize our investments and remain profitable.
“The company’s balance sheet remains strong, with more than $150 million of available cash,” Klei added.
Selected Highlights and Metrics
- Kabam completed a fundraising round with a $120 million investment from Alibaba and increased the company’s valuation to more than $1 billion
- Four Kabam games surpassed $100 million in lifetime revenues
- A record 12 Kabam games grossed more than $1 million in a month in 2014
- Kabam acquired Phoenix Age Studios in San Francisco
- Kabam announced new partnerships with Disney and Lionsgate for games based on those Hollywood studios’ hit franchises
- Kabam maintains a worldwide employee base of more than 800
- Kabam’s gross revenues is a non-GAAP number and is equivalent to bookings in the video game industry
About Kabam
Kabam, Inc. (“Kabam”) creates and develops games that are available on mobile devices via its own dedicated channel in the Apple App Store, Google Play, and the Amazon Appstore. Valued at more than $1 billion, Kabam is the 6th fastest growing company overall in North America, according to Deloitte LLP. The company has been profitable since 2012. Kabam's Kingdoms of Camelot franchise has grossed more than $250 million, making it one of the top 10 strategy franchises of all time. Kabam has also created four titles that have grossed more than $100 million each in their life. In 2014, Kabam had three titles rank in the Top 50 Grossing apps on iOS. Kabam has more than 800 employees around the world, with corporate headquarters in San Francisco. The company's investors include Alibaba, Canaan Partners, Google, MGM, Intel, Pinnacle Ventures, Redpoint Ventures, Warner Brothers and others. More information about Kabam can be found at www.kabam.com.
