Alibaba has invested US$120 million in San Francisco-based Kabam (via Wall Street Journal), a game studio that is focussed on the free-to-play market for core gamers. This enables the Chinese company to have a seat on the game studio’s board, as well as the rights to publish its many fantasy-themed games in the Chinese mobile market via Alibaba’s apps such as Taobao (retail) and Laiwang (chat app).
Kabam is known for creating mobile strategy games like Kingdoms of Camelot and The Hobbit: Kingdoms of Middle-earth. Both these games have generated more than US$100 million in revenue; the company will focus on more games based on movie license properties like The Fast and the Furious franchise and The Hunger Games series.
Alibaba’s investment in gaming is the same tactic that Chinese online portal giant Tencent used previously. Tencent invested US$231 million in Riot Games, the creators of popular multiplayer online battle arena game League of Legends, and US$330 million in Epic Games, the folks behind action games like Gears of War and Unreal Tournament.
Kabam and Alibaba have yet to disclose any more information concerning the investment. It remains to be seen if Kabam will take extra steps in localising Kingdoms of Camelot for Chinese consumers and work together with Alibaba. Pitching a game using Arthurian legend as its theme can be a hard sell compared to a universal theme like Candy Crush Saga; it’s up to the popularity of Alibaba’s apps to bring in new Chinese players.
In a related news, Alibaba will have an initial public offering in September that will raise over US$20 billion for the company.