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Despite record growth, the company says it missed the mark, will scale back third party publishing
(Updated with comment from Kabam)
Mobile gaming company Kabam is often mentioned as a potential IPO candidate, and with its latest revenue numbers I have a feeling that conversation might become more heated.
Kabam earned $400 million in revenue in 2014, the company revealed in a press release on Thursday, up from the $360 million in revenues it saw the year prior. The company has now grown for five consecutive years. Profitable since 2012, Kabam is now over ten times larger than it was four years ago.
Despite those impressive numbers, they were actually lower than the company had expected, with Co-Founder and CEO Kevin Chou putting the blame on "newer divisions" which he said "underperformed."
In addition, he said that Kabam "intentionally dialed down other revenue-generating opportunities to better position Kabam for the long term."
What that means going forward is that Kabam will be cutting back on games that are run by its third party publishing group.
“We have enjoyed some good successes with publishing, but not at the volume we planned," said Chou.
The move comes only a month or so after Kabam revealed that it would be transferring a majority of its Web-based games to RockYou, so that Kabam could more of its focus on developing games for mobile on smartphones and tablets. Games that were transferred included Dragons of Atlantis, Kingdoms of Camelot and The Godfather.
2014 was a good year for Kabam’s games, as four of them surpassed $100 million in lifetime revenues and 12 Kabam games grossed more than $1 million per month in 2014, a record for the company.
Still, despite those record numbers, the company has no plans to go public at this time
"While we have said in the past that Kabam's Board of Directors has discussed a possible IPO, there have not been and there currently are no plans," a spokesperson for Kabam told VatorNews.
Founded in 2006, Kabam is one of the better-known gaming studios out there right now, especially when it comes to its free-to-play games. Its games The Hobbit: Kingdoms of Middle-earth and Kingdoms of Camelot: Battle for the North both generated more than $100 million in revenue. Last year, Kabam had two of the top ten grossing apps in the App Store.
The company has raised $245 million, most recently taking $120 million from Chinese Internet giant Alibaba in August of 2014. As part of that deal, Alibaba agreed to publish Kabam's mobile games in China across its mobile applications, including Mobile Taobao and Laiwang. The round also valued Kabam at just north of $1 billion.
Earlier this month Kabam made its eighth and ninth acquisitions, purchasing game studios TapZen and Magic Pixel. The two studios will be merged into a new Kabam branded Los Angeles studio.
(Image source: variety.com)
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Kabam is an interactive entertainment company leading the next wave in social gaming, developing and publishing massively multiplayer social games (MMSG’s), including the popular and critically praised title Kingdoms of Camelot and Dragons of Atlantis. Our studios focus on combining the best elements of traditional and social gaming to appeal to a growing audience of players looking for deeper, more engaging social games. The first wave of Kabam’s new games for Facebook and leading media sites have been widely recognized for their depth of play and social interaction.
Kabam started out as Watercooler, whose aim was to make connecting with your friends, family, and other fans of your favorite TV shows or Sports teams more compelling than ever before. By bringing fan communities into the context of your social network, Watercooler enables more engaging sports and TV fan experiences. Fans are able to access Watercooler's FanSection and TVLoop communities no matter where they are on the web: Facebook, MySpace, Bebo, Friendster, Hi5, MyYahoo, and TVLoop.com. Over 35 million sports and TV fans have joined Watercooler's fan applications making it the largest online fan community.
Kabam was founded by a team of social networking and community software professionals in Mountain View, CA, in 2006. The company has raised a Series A round of financing from Canaan Partners of Menlo Park, CA.