Jam City co-founders Josh Yguado (left), Chris DeWolfe (centre) and Aber Whitcomb have scored with two massive smartphone hits: Cookie Jam and Panda Pop
Image: Ethan Pines for Forbes India
Château-Crème-a-Lot is a digital fortress of giant wafers, dipped cones and marshmallow swirls. It’s one of several dessert islands where the bright-eyed chef Panda solves puzzles with shaped chocolates to earn ingredients to make everything from cookies to cake pops on a quest to be the best confectioner. Chef Panda is the star of Cookie Jam Blast, a new game by Jam City, a seven-year-old mobile-gaming company in Culver City, California. It’s a spin-off of Jam City’s most successful franchise, Cookie Jam, which has been downloaded more than 100 million times and generated about half a billion dollars in revenue since its 2014 debut.
“We expect Cookie Jam to be around 50 years from now,” says Jam City co-founder and CEO Chris DeWolfe, 51. Such longing for permanence seems jarring in the hyperactive world of smartphone gaming, but it makes perfect sense when one recalls that in a prior life, DeWolfe was the CEO and co-founder of MySpace, the pioneering social media company that most definitely did not become Facebook. This time, he wants his creation to stick around.
It’s off to a good start. Since its launch in 2010, Jam City has become one of the fastest-growing private mobile-gaming companies, amassing 50 million monthly users and sending six titles to the charts that track the 100 highest-grossing games. It competes with giants such as Activision Blizzard, Tencent-owned Supercell and Electronic Arts. “There are only about ten companies who have had more than one game in the top 100,” says Wedbush Securities analyst Michael Pachter, who estimates the mobile-gaming market at $40 billion. “Getting more than one means you’ve figured out a formula that’s impressive.”
Jam City, which until last year was known as Social Gaming Network, builds half its puzzle and storytelling games from scratch and the other half using licensed major entertainment brands like Futurama and Peanuts. The original properties are more successful—they account for an estimated 75 percent of revenue—but the Hollywood stuff is safer, since it comes with “an instant user base”, says Josh Yguado, a former 20th Century Fox executive, who along with ex-MySpace CTO Aber Whitcomb helped DeWolfe start the company. But safety comes at a price—usually about 10 percent to 12 percent of a Hollywood title’s revenue is paid as a royalty to the studio.
The mix of swinging for the fences with original titles and bunting with Hollywood brands is paying off. Jam City saw sales of $322 million last year and hopes to exceed $400 million this year. Using a business model common in mobile gaming, Jam City receives the majority of its revenue from so-called “in-app purchases”, in which players pay for special features like new characters or extra lives. (All Jam City games are free to download.) The company has been diversifying its revenue streams by adding in-game advertisements, which could make up 10 percent of 2017 revenue. Jam City, which aims to go public within a year, says it has been profitable for three years but won’t disclose precise figures. Pachter estimates a profit of about $20 million this year.
Since its launch in 2010, Jam City has amassed 50 million monthly users