Kabam stands out from the crowded social gaming market as a company that focuses on core gamers through titles like Kingdoms of Camelot. Kevin Chou, CEO and co-founder of Kabam, said the company's four online games target the hardcore male gamer that's a little bit younger than a social gamer. But across its titles, the developer incorporates a lot of social elements into the hardcore gaming experience.
How do you think social gaming will fit into the games industry in the long run?
I'm really excited about the future of social games and to me the key growth sector is the free-to-play browser-based games. These games take away the friction for a player to get into a great gaming experience. If I'm a gamer and I grew up playing Nintendo games and arcade games, I had to go out and buy a console and then go buy individual games for that console, which I was constantly upgrading. I had to make that purchase before I even knew if I really enjoyed the game or not. All of that's changing in this world of connected devices and Internet in a cloud, where we can put a game in the cloud so anybody whether it's on a PC, laptop, mobile device, or inside Facebook or some other platform that consumers use. They can get into that game very quickly from a technology perspective with no downloads. It just works. And by the way, they don't have to pay for it up front before they know if they like the game or not. At the core of what makes social games such an exciting industry today is that it's opening up the world for new games to get penetration into a much larger audience because we're able to serve consumers all around the world with the free-to-play frictionless technology model.
Do you think that microtransactions seen in social games, MMO's and 99 cent app stores will drive prices downward across the whole gaming industry as it happened in music?
Especially in mobile today, there's a lot of debate about the future of mobile games. I think the model of paid downloads, even if it's a 99 cent download price, is basically going to nothing. If I want to play a mobile game and I have to pay 99 cents up front, that creates a barrier for me to get into that game versus the Freemium mobile games that are suddenly becoming very popular. The ability for me to download a free game on my iPad, iPhone or my Android device for free and then get into the game experience and then pay in terms of microtransactions for virtual goods inside of that game experience is the superior model for the games industry. I think that's where the entire industry is going to move over time.
What are your thoughts on the emergence of cloud gaming and how will that impact the industry moving forward?
I think more and more software, in general, will move into the cloud and gaming is no different. You see this with the music industry. You see it with the movie industry. You're starting to see it with the publishing industry. Basically, entertainment content that you can digitize is moving into the cloud. Mobile is probably one of the first steps backward from it in terms of consumers downloading the game onto their mobile device before they can play it. But I think in the future things will converge more and more, where the intelligence will live inside the cloud and players will access that game in the cloud and play wherever they are, including on mobile devices, tablets, PCs, and laptops.
What role will retailers play in the future where more games will be in the cloud and services like yours or Gaikai deliver games straight to consumers?
The traditional retail business model is in danger. If you take a look at companies like Blockbuster and Hollywood Video that have built a huge business within the movie distribution and rental business, their business has basically collapsed in a fairly short amount of time as that entertainment content went into a digital distribution model. The smart players will figure out their digital strategies and incorporate that. That's why you see companies like GameStop buying Kongregate and a couple of other smaller companies to get into the digital distribution world. That trend is going to continue. Major retailers that think about their business as the distribution of game content and the ability to help consumers find great games regardless of the whether the platform is retail or digital will survive.
What are your thoughts on the future of PC gaming?
PC gaming basically will transition into moving to the cloud. We're already seeing companies like Trion that are doing some really interesting things. More games are now available as downloads that you play as a connected experience with other players in real time. The PC gaming model is shifting from being a solitary experience to a cloud-based experience with access through a PC or any Internet-connected device.
How will new tablets and smartphones change the dynamic of gaming moving forward?
I'm really excited about how fast smartphone penetration is growing. You have Apple with their iOS platform for both tablets and mobile devices that offers a great end-to-end solution for the distribution of games. And you have Android, which is really more of a component solution. They're focused obviously on the OS, but they're putting together partnerships through the carriers as well as through applications developers to solve a number of different parts of the puzzle for players, but doing it in a more modular fashion that works within their large ecosystem. As more and more consumers have get these smartphones and gaming remains the number one application on these devices, there's a very bright future for gaming. It's an area that Kabam takes very seriously and is making some big investments in.
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