Kabam COO says mobile game companies have to get serious about Asia

SAN FRANCISCO — It’s time for North American mobile game developers and publishers to take their apps to the trade routes of Asia.

Kabam‘s chief operating officer, Kent Wakeford, said at VentureBeat’s MobileBeat 2014 conference that the growth of the Asian mobile device and mobile game markets is so compelling that Western developers have to move into them. That’s kind of a no-brainer, but Western developers need more nudges, since they’ve given the Asian market lip service in the past.

“It’s a phenomenal market,” Wakeford said. “Asia will command over 50 percent of installs. Anyone in this room not thinking about Asia should be.”

He noted that in 2013, Asia had 820 million mobile devices. In the next four years, that is expected to grow to more than 1.9 billion. As for games, Asia’s $7 billion mobile market in 2013 was twice as big as North America’s mobile game market. And Asia is expected to grow to $12 billion, Wakeford said.

The challenge for Western game makers is that Asia is complex market. Android rules in places like China, but the market is fragmented across many different app stores. In different countries, different devices rule.

“You have firewall, hosting, and payment issues,” Wakeford said. “There are things you have to address to get in. But if you can, it’s a tremendous opportunity.”

Kabam found that 1 percent to 2 percent of its audience for games like Kingdoms of Camelot naturally came from Asia. Then the company started localizing its games a few years ago to different languages, and the result is that Asia now accounts for 10 percent of sales.

“It’s still not where it could be,” Wakeford said. “At Kabam, we are in the initial stages of taking those steps.”

Wakeford pointed to the success of other Western companies to show what’s possible. He noted that Plants vs Zombies 2: It’s About Time saw about 25 percent of its revenues come from China alone, based on the reported results.

“If done right, the opportunity is tremendous,” Wakeford said.

Other difficulties include the need to make the art style for a game appropriate. The Three Kingdoms mythology sells well as the theme for a game in China, but it has little meaning for Western gamers.

Then there are the mobile messaging networks like Line, Kakao, and WeChat. They publish a limited number of games on their own mobile apps, and those apps can really take off in places like South Korea.

But they also take 20 percent of the revenue, on top of the 30 percent that the app store owner takes.

“If they take 20 percent, you can think of it as marketing,” Wakeford said. “If I get a company to do the marketing for me, I would be willing to do that.

Malathi Nayak, a writer for Reuters and moderator of the session, asked how long it would be before the Western companies made their mark.

Wakeford replied, “2015 is when you will see Western companies be on the top of the charts in Asia.

To plant more roots in Asia, Kabam created a $50 million fund to invest in Asian game developers, either to publish games in Asia or in Western markets.

Glu Games’ Eternity Warriors is an example of a Western game that has more than 50 percent of its revenues coming from Asia.

Last week, Kabam announced that it had a major deal with Warner Bros. to make games based on The Lord of the Rings and the Mad Max franchises.

Kabam’s games have been published on mobile devices on the Apple iTunes App Store, Google Play, and Amazon Appstore. They have also been published on the web via Facebook, Yahoo, and Kabam.com. Kabam says it is the fastest-growing Internet media company in the San Francisco Bay Area, and it had revenues of $360 million in 2013, up 100 percent from a year earlier.

Investors include Warner Bros., Google, MGM, Intel, Canaan Partners, Redpoint Ventures, and Pinnacle Ventures. Kabam has more than 800 employees.