The mobile market represents the biggest chunk of video game sales on the planet. It's also the most diverse and contentious, with no clear formula for achieving success or return on investment. When something like Flappy Bird can bring in a million times its operating cost while presumably sure-fire licensed games flop, there's no reliable way to know if your developer's next game will break even. Kabam, a publisher focused on licensed titles from Marvel, Warner Bros., and Universal, is no exception. The Wall Street Journal reports that the company will be selling most of its assets early next year.
The buyer is Netmarble, another, larger game publisher from South Korea that focuses on similar freemium titles. In fact, both companies have developed games for large Hollywood studios: while Kabam makes the Marvel: Contest of Champions one-on-one fighter, Netmarble makes Marvel: Future Fight, a top-down dungeon crawler with most of the same characters. Though Contest of Champions isn't Kabam's only mobile game, it produced hundreds of millions of dollars in revenue and 95% of the company's income. Kabam is based in San Francisco, but Netmarble will get ownership of its Vancouver office which developed Contest of Champions.
The precise terms of the deal weren't disclosed, but what's left of Kabam probably won't have enough money or infrastructure to continue making games with lucrative movie licenses like The Lord of the Rings or The Fast and the Furious. Netmarble will get the rights to the Kabam name along with 250 current employees. Presumably Contest of Champions will continue to operate, but Kabam's handful of less lucrative titles probably won't be updated for much longer.
The WSJ notes that Contest of Champions brought in more than $450 million in revenue since its December 2014 release, which apparently still wasn't enough to keep the ten-year-old company independent. The sale illustrates the cutthroat nature of the mobile game industry: publishers and partners like Disney aren't willing to settle for middling success from solid investment, not when smaller companies can make even more money without the recognizable brands. For example, the EA-published Star Wars Galaxies game is currently number eight on the Play Store's top grossing game list, behind flashy but creatively stagnant titles like Mobile Strike, Game of War, Clash of Clans, and two versions of Candy Crush. It's doing just a little better than "Slotmania Slots" from Playtika. That must be frustrating for Disney, since the game has a billion-dollar license given to one of the world's largest video game publishers.
Kabam's Marvel: Contest of Champions is number sixteen on the same list, behind "House of Fun Slots Casino," also by Playtika.
Source: The Wall Street Journal