Over the last six years of building games, we’ve realized that our creative passion and what we’re good at as a business intersect in games where the other players are the heart of the gameplay. We’ve distilled this into our renewed commitment to create a unique Kabam brand of game, which we are passionately working to bring to the world.
We call this our mission to “create the world’s favorite massively multiplayer free-to-play games.”
Massively multiplayer games are difficult to make great. This is how we’re focused to deliver on our mission:
- Develop fewer titles and spend much more time crafting (“Fewer, Bigger, Bolder”)
- Invest in franchises with long term thinking about our player community
- Achieve technical excellence to offer a great game experience
- Win in Asia by extending our franchises globally
- Lean into global brands
We’ve been making smart but tough moves to proactively transition Kabam from the type of games we started making early in our company life to AAA massively multiplayer games. These moves started with the divestiture of our web games to RockYou last year. Then, this past month, we broke the news about the divestiture of our first generation mobile games to Gaea as we focus all of Kabam on our mission.
Implementing our strategy and adapting our business comes with organizational changes that are difficult but necessary. The changes we are making today impact close to eight percent of our employee base, which includes eliminating some positions in the organization that focused on our web games or first generation mobile games. It is never easy to say goodbye, and we are deeply grateful to the contributions these people have made. Wherever possible, we are moving talent directly into the studios to fortify our game teams that work on making and operating games.
Kabam’s revenue was flat last year as we shifted revenue streams from legacy to our new generation of games, but we were much more profitable as we began to realize the efficiencies of our strategy. Efficiencies include consolidating from 15 disparate technology stacks to our proprietary stacks, no longer supporting multiple web platforms, and aligning our employee base. We’re also on the cusp of realizing efficiencies in distributing our titles in Asia, where additional revenues drop to the bottom line of a franchise.
Marvel Contest of Champions is a great example of our new generation of bigger and bolder games. It represents the quality level of the games we will bring to global audiences, receiving Editor’s Choice when it launched (as did all of our games launched in 2015). It continues to be one of Kabam’s best games to date, having surpassed 60 million players and generating over $200 million in revenue since its launch in December 2014. It has been a top ten grossing game in the Apple App Store in 119 countries around the world. Marvel Contest of Champions was one of the only games in the world to debut and break into the top ten grossing charts.
As part of our shift in strategy, Kabam is in a position to make some of the biggest game experiences in our history. We aim to continue creating games with the same quality experience as Marvel Contest of Champions, hence, our increased investments in new game development. Last year, Kabam invested $50 million in R&D for the next generation of games to launch in 2016 and beyond. We are on pace to invest even more this year, making our total committed investments into the seven unannounced new titles to more than $100 million, with an average development cost of $14 million per title.
Our pipeline and all the changes we are making to the company reflect our singular focus on our mission. Kabam will continue to evolve into a better, stronger and healthier organization passionate about making massively multiplayer free-to-play games.