Harry Potter Hot, Marvel Avengers Not in Jam City Game Plans

(Bloomberg) -- Mobile-game maker Jam City Inc. is cutting its investment in its Marvel Avengers superhero game as the company looks for growth in other licensed properties such as Harry Potter.

The company introduced Harry Potter: Hogwarts Mystery in April. The game, which is free, had more than 3 million players sign up before the launch and is “monetizing well,” Chief Executive Officer Chris DeWolfe said in an interview. DeWolfe would still consider releasing titles in the Marvel games market if he saw opportunity in the future.

The pull back reflects growing competition in Marvel games. 21st Century Fox Inc. launched its free-to-play Marvel Strike Force in March. Netmarble Corp., Jam City’s majority owner, offers two mobile Marvel games, Contest of Champions and Future Fight. Sony Corp. showed off a new console-based Spider-Man game, another Marvel title, at the industry’s big E3 trade show this month. Jam City’s Marvel Avengers Academy was released in 2016.

Walt Disney Co., which owns the Marvel characters, began getting out of video-game development several years ago to limit its risk, shifting instead to licensing to other game makers. The Burbank, California-based entertainment giant shut down Marvel Heroes, an online game, in late 2017 following poor performance. Films from the company’s Marvel superhero division, however, are leading the box office this year and driving Disney’s 36 percent share of domestic ticket sales.

Disney Model

“Licensing is a good model for Disney because it helps them expand the brand and brings them revenue,” said Matthew Kanterman, an analyst with Bloomberg Intelligence. “It does create a large sea of games out there.”

Fox said its new Marvel game has seen “tremendous engagement by our millions of players around the world” and is performing above expectations. Disney said its superhero titles overall were doing well.

“Demand for Marvel games has consistently grown year over year, and Marvel continues to be one of the most successful brands on the App Store and on Google Play,” Jay Ong, a senior vice president for games at Marvel, said in an emailed statement.

DeWolfe, who also co-founded the social networking site MySpace, has steered his Culver City, California-based company toward licensed games over the past two years, including ones based on the “Peanuts” comic strip and Fox’s “Family Guy” TV show. The company enjoyed early success with original titles such as Cookie Jam and Panda Pop, which continue to do well, DeWolfe said.

Jam City’s games are typically free to play, with the company generating revenue from advertising or purchases of extra play time in the game or other items.

©2018 Bloomberg L.P.