MOBILE GAMING
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The Next Big Thing

Game recording service Kamcord 'investing heavily' as China's mobile gaming market overtakes US

PUBLISHED : Tuesday, 02 June, 2015, 8:01am
UPDATED : Thursday, 04 June, 2015, 8:45am

Fast-growing start-up Kamcord, backed by international and Chinese internet giants including Tencent and Google Ventures, will invest heavily in China as the mainland sets to overtake the US as the world’s largest mobile gaming market, said a top executive at the company.

The San Francisco-based mobile game recording and sharing start-up is one of the world’s most popular online communities for mobile game players. It plans to set up an office in mainland China to tap gamers’ fast and growing shift from the PC to mobile devices.

“We are investing heavily in China in 2015, along with Japan and Korea. These three countries make up 50 per cent of mobile gaming revenue,” Richard Hu, who leads the firm’s global expansion, told the South China Morning Post in a recent interview.

Kamcord plans to open a new position of country manager for mainland China and build a team around the person to strengthen the company's presence there and also help deal with the quirks that make China such a unique market: Android app store fragmentation and the proliferation of lower-end Android devices.

“From our experience of entering Japan and South Korea, we’ve found that you really need a local team on the ground building relationships in order to drive adoption,” he said. The firm already has offices in Tokyo and Seoul.

Kamcord counts mainland Chinese companies including iDreamsky, Triniti Interactive and Elex as partners as more and more Chinese companies try to expand overseas, though getting more people to use its technology in China was also an important goal, Hu said.

Kamcord produces a software developer kit (SDK) for developers to drop into their mobile games. The code allows players to record slices of their game play and share key moments.

“Our top users routinely do voice-overs where they talk about their lives or just sing their favourite Taylor Swift song. Chat in the Kamcord app is blowing up. Users are sending 20 chat messages a day on average,” Hu said.

Kamcord's technology is embedded in over 500 mobile games and users have generated over 44 million videos. Monthly active users have reached over 150 million, a meteoric rise from 5 million as of last year, he said.

One of the effects, along with the videos becoming a tutorial of sorts for less experienced players and a way to connect with other gamers, is that game developers get an easy–and free–way to market their games to new users.

China will overtake the US as the world's largest mobile gaming market in 2016, according to a new white paper released in April by the Global Mobile Game Confederation, which predicted that revenue from mobile games in China will reach US$7.7 billion in 2016, compared to US$7.3 billion in the US.

Chinese growth will be driven by an increase in smartphone users and a rise in the number of paying gamers as the country becomes more affluent, the report said.

In 2014, there were a total of 383 million Chinese mobile gamers, compared to 137 million in the US. This will increase to 475 million and 157 million respectively in the next three years, according to GMGC.

Beijing-based consultancy iResearch said in a recent report that the rapid growth of mobile game has brought online game revenue to exceed 100 billion yuan for the first time last year.

“Mobile video consumption is on the rise in China, with user generated content being a major contributor to that. We think this bodes well for us in China because we think Chinese mobile gamers will be keen to upload and consume gameplay video content from mobile games,” Hu said.

“It’s an exciting market that we cannot afford to ignore,” he said.

“There are also huge synergies across countries: US games want to be big in China and Japanese games want to be huge in the US.”

Kamcord, which employs 28 people, recently launched a set of tools to enable gamers to edit their recorded game play from their phone, rather than sending the recorded play to their computer to edit and then back to their phone to showcase their top gaming moments with gaming peers.

In 2012, the start-up was accepted into Y Combinator, the influential and capital-rich start-up incubator that has nurtured many leading online companies including Dropbox and Airbnb.

It raised US$2.5 million in seed funding from Tencent, Andreessen Horowitz, and Google Ventures. In May 2014, Kamcord raised a further US$7.6 million in series-A funding from Translink and DeNA. While in December last year, it raised US$15 million in a series-B funding led by Japanese gaming giant GungHo and Tencent at a valuation of around US$100 million.

Kamcord does not generate revenue and Hu said the company was at pre-revenue stage as it has “ample runway from the funds they’ve raised to continue executing.”

Founders Kevin Wang, Aditya Rathnam, and Matt Zitzmann met while studying computer science at MIT and interned at Google in the summer of 2007. Their paths diverged after graduation but came back together in 2012 after which they began brainstorming company ideas every night for a month before they eventually conceptualised Kamcord.

“Kevin was playing [first-person shooter] Battlefield 3 and watching Battlefield videos on YouTube. In one of our brainstorming sessions, he asked: ‘Why doesn’t this exist for mobile gaming? Where isn’t there a place I can go to watch mobile gameplay?’ We immediately felt like this was a concept that was going to exist in four years – whether we built it or someone else did,” Hu said.