Kevin Chou is co-founder and CEO of Kabam, a leading mobile games developer focused on massively multiplayer free-to-play games. Kevin has led the company as the founding CEO from business plan to $400 million USD in annual profitable revenues.
Kevin has secured partnerships with leading game platforms, as well as with Hollywood studio giants such as Disney, Lionsgate, MGM, NBC Universal, Paramount and Warner Brothers for games based on some of the world’s most beloved entertainment franchises. Under Kevin’s leadership, Kabam has made more than $240 million from venture and strategic investors, including some of the world’s largest entertainment and internet companies such as Alibaba, Google, Intel and Warner Brothers.
Kabam’s Marvel Contest of Champions has been downloaded over 83 million times and has grossed more than $350 million in revenue.
Prior to Kabam, Kevin was a venture capitalist at Canaan Partners, investing in consumer internet and digital media companies.
Cracking the Top
The top grossing charts for mobile have become increasingly immutable over the past couple of years. During their session, Kevin noted that the top games had followed a typical curve of downloads: most of them coming in the first year and then gradually dropping off. Despite this, games like Clash of Clans and Candy Crush Saga remain at the top because of high player retention.
Kevin said with this revelation they changed the way they looked at retention. Noting that the industry often looks at retention in terms of day one, day seven and (in some rare cases) day 90, they knew they needed some new language along long-term retention. So they started looking at stats around “regulars” - people who have dedicated themselves to games for years.
The regulars were found to spend over 15 hours a week on average on a game, in defiance of the stereotype of mobile players all being casual. They have nearly 100 percent retention over the life of a game, so gaining these users is key. So Kabam made sure they were serving these regulars while still making a game simple enough to pick up and play.
Kevin confirmed that some VIP players might spend hundreds or thousands of dollars in a short period of time, but noted they later drop out. Kabam found that these VIP players may come in and out of the game, but the regulars would end up spending more over a longer period of time. So Kabam changed its focus to creating content for the regulars rather than trying to get VIP players to come back to the game.
Maximizing Those Regulars
Kevin noted that the real profitability for many games comes down the road after multiple years, the true life-time value (LTV). Gaining a high LTV, it is important to retain those loyal regulars. Because of this, Kabam plans to have their games in a stable state when they launch so they can be better positioned to have those regular users and plan for LTV over multiple years.
CPIs can often be $4 to $5 U.S. dollars these days, which is why a high LTV is so key. High profile IP (which Kabam has leveraged with games based on Marvel heroes, The Hunger Games and The Hobbit), is beneficial with CPI. Kevin noted that Pokemon Go also benefited from this, building on the success of Ingress but having a highly recognized IP. Not every game with a notable IP has done well, showing that it takes a good developer with the right economics and operation to make a game successful.
Check out the full details of Kevin’s session in the video below!
