Facebook Game Makers Kabam, Zynga Turn to China for Talent
Mark Zuckerberg, founder and CEO of Facebook Inc.
Tony Avelar/Bloomberg
Mark Zuckerberg, founder and chief executive officer of Facebook Inc.
Mark Zuckerberg, founder and chief executive officer of Facebook Inc. Photographer: Tony Avelar/Bloomberg
Facebook Game Makers Kabam, Zynga Turn to China
Facebook.com via Bloomberg
Zynga Game Network Inc.'s game "FarmVille".
Zynga Game Network Inc.'s game "FarmVille". Source: Facebook.com via Bloomberg
Facebook Inc. game developers Kabam and Zynga Game Network Inc. said they will increasingly turn to Chinese software designers to make games for the website, tapping engineering talent in the Internet’s largest market.
Kabam, maker of the Facebook game “Kingdoms of Camelot,” set up a Beijing studio in May that has two unannounced titles under development, as many as are in progress at the company’s U.S. studios, Andy Lee, Asia managing director for Redwood City, California-based Kabam, said in an interview yesterday. Zynga, maker of the “FarmVille” and “Mafia Wars” games on Facebook, said it wants to harness China’s faster pace of innovation.
“China is very important to us,” Lee said. “We see ourselves aggressively expanding in the region with multiple studios in China. This is a large part of our international strategy, and my task is to manage that growth.”
The Asian nation has the world’s biggest Internet market by users, with 420 million online, creating a large base to stimulate the development of talented software designers, Lee said. After becoming the largest exporting nation making computers, toys and clothes sold at Wal-Mart Stores Inc. outlets, China is moving into software development as the Internet’s center of gravity shifts to the country.
“China is moving up the value chain from low-margin, high- volume manufactured goods into the realm of design,” said Duncan Clark, chairman of Beijing-based technology consultant BDA China Ltd. “The value is in design, and that is where China wants to head.”
Betfair, Canaan Backing
Kabam has 35 employees in Beijing, its first international studio, compared with 100 workers in the U.S., Lee said. Over the next few years, the number of employees in China will likely exceed the U.S. workforce, he said.
Closely held Kabam, which changed its name from Watercooler in August, has raised about $9.5 million from London-based Betfair Group Ltd. and Canaan Partners in Westport, Connecticut.
To attract cost-conscious consumers, fight off pirates and survive in China’s competitive market, software developers “have to work harder” than those in the U.S., leading to a large body of talented engineers, said Andy Tian, head of Zynga’s Beijing studio.
San Francisco-based Zynga has set up shop in China to take advantage of the country’s growing software prowess. Zynga in May announced the acquisition of Beijing-based social-gaming company XPD Media, the company’s first step into the Asian market. XPD then had 40 employees, including co-founder Tian, who Zynga said would immediately be integrated into its global workforce to focus on engineering and product development.
Harder Workers
“People here are innovating in terms of business model faster than they are doing in the West,” Zynga’s Tian said on Oct. 18 at a Stanford University-sponsored conference in Beijing. “China is a leading area of innovation. It’s big already, but growth is continuing.”
Facebook is inaccessible in China, so games developed by Kabam and Zynga specifically for that site won’t be accessible in their country of origin.
Closely held Zynga has raised $360 million from investors and says it has 360 million active monthly users.
Chinese software-development companies, many with only a handful of employees each, have cornered about a 10 percent share of the revenue from Apple Inc.’s App Store, estimates James Ding, managing director of GSR Ventures, a Beijing-based venture capital fund.
“China has a market potential not only to follow the U.S.; it can become a home market for new applications,” Ding said at the Stanford University conference this week. “A lot of things in this part of the world are being tried for the first time that can be used in the U.S. and global market. We’ll see more and more of these types of applications in the future.”
At Kabam, the China growth can be seen in the company’s expanding studio, Lee said. After only five months, Kabam is moving to a new office that will be triple the size of its current office at Beijing’s eTower, he said.
“China is one of the most important places for game innovation,” Lee said.
--Edmond Lococo. Editors: Jonathan Annells, Terje Langeland
To contact the reporter on this story: Edmond Lococo in Beijing at elococo@bloomberg.net
To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net
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