Leading Free-to-Play Games Company Grows Revenue 70 Percent; Leads Disruption to Become Mobile Leader
SAN FRANCISCO--(BUSINESS WIRE)--Kabam, the leader in free-to-play games for core players, today announced 2012 gross revenue of more than $180 million, an increase of 70 percent over 2011. The privately held company did not disclose earnings but said the company was profitable in 2012.
“Kabam blew past its plan in 2012,” said Co-Founder and CEO Kevin Chou. “At this time last year we forecast 2012 revenue to grow by 30 to 40 percent. Because of our team’s focus on strategic growth across diverse game genres and platforms, including mobile and the Web, we exceeded our own expectations and entered 2013 with an annualized run rate in excess of $200 million.
“Kabam’s fastest growth is the mobile sector as Kabam games are popular on both iOS and Android devices,” Chou added. “We have built what is now well more than a $100 million-plus annualized mobile business in less than one year with a slate of exciting new games across multiple genres.
“Free-to-play games are clearly in the middle of disrupting the videogame industry,” Chou said, referring to how players worldwide can access their entertainment via online channels for free compared with the need to purchase a $400 console and individual games for up to $60 each. “And now Kabam is leveraging its franchise IP and technology to become the leader in free-to-play games on mobile devices in the western world,” Chou said.
Kabam is a Series D company with its most recent round of $75 million in May 2011. At the time, Kabam was valued at more than $500 million. Investors include Google Ventures, Intel Capital, Redpoint Ventures and Canaan Partners. Last year Warner Bros. Entertainment Inc. (Warner Bros) and Metro-Goldwyn-Mayer Studios Inc. (MGM) became investors as well, partnering for an investment in Kabam in a purchase of shares from an earlier investor.
“Kabam achieved an enviable list of key financial milestones in 2012,” said Chief Financial Officer Steven Klei. “Complementing our growth was an equally impressive improvement in margins, resulting in a profitable 2012. And because Kabam’s financial model and unit economics are so strong, we expect both continued rapid growth and margin expansion again in 2013.
“Kabam is well positioned to continue its significant investments in growth as we enter 2013 with more than $45 million of cash,” Klei added.
Selected Operating Highlights and Metrics:
- Kabam’s average revenue per daily active user (ARPDAU) is eight- to nine-times higher than the industry’s largest company.
- Kabam’s Kingdoms of Camelot: Battle for the North placed first on Apple’s Highest Grossing Apps list for 2012.
- Kabam became one of the rare companies to have three games simultaneously ranked on the Top 25 Grossing Apps lists for both iOS and Android at the end of 2012.
- Kabam demonstrated the ability to capitalize on acquired intellectual property (IP) in addition to its internally-developed IP. Kabam and Warner Bros. Interactive Entertainment partnered to co-publish The Hobbit: Kingdoms of Middle-earth for mobile devices, inspired by Peter Jackson’s The Hobbit Trilogy, a production of New Line Cinema and Metro-Goldwyn-Mayer Pictures (MGM). The game became the fastest growing title in Kabam history, becoming one of the top 10 grossing apps in 50 countries in two months.
- A record seven Kabam games grossed more than $1 million per month in 2012.
- Kabam demonstrated the ability to grow long-lived franchises as Kingdoms of Camelot became one of the top ten strategy games of all time, grossing more than $100 million since it was launched in September 2009.
- Kabam diversified its revenue base with significant revenue in each of the key gaming platforms of iOS, Android, the Web and Facebook, compared with year-end 2011 when Kabam’s revenue was essentially 100 percent Facebook dependent.
- Kabam made several small studio acquisitions in 2012 to expand development capabilities, increase access to key local talent and extend its geographic footprint. The company now has studios or corporate operation centers strategically spread across North America, Europe and Asia. The most recent acquisition is Exploding Barrel Games in Vancouver, British Columbia, Canada.
- Kabam grew its worldwide headcount to more than 500 in 2012.
- Kabam’s gross revenue is a non-GAAP number and is equivalent to bookings in the video game industry.
To learn more about Kabam, join the team, or play Kabam games for free online, visit www.kabam.com.
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