ATVI Activision Blizzard Inc

Mobile-videogame publisher Kabam Inc. is weighing multiple acquisition offers for its most lucrative studio, according to a person familiar with the matter, in a sign of continued deal making in the game industry.

Kabam has received more than a half-dozen offers from Asian and U.S. gaming and media companies for its Vancouver, British Columbia, studio, the person familiar with the matter said. Most of the offers were between $700 million and $800 million, the person said. The Vancouver studio makes the company's most lucrative game, "Marvel: Contest of Champions," and is developing a title based on "Transformers."

The person familiar with the matter said Kabam's board sought bids for the Vancouver studio after receiving an unsolicited offer from an Asian company over the summer. The board is evaluating the bids, with help from advisers at Bank of America Merrill Lynch and China Renaissance, and a decision is expected in about a month, the person said.

Selling the Vancouver studio might allow the company to cash out some early investors while remaining in the mobile-game business, which is on track to grow 21.3% to $36.9 billion in world-wide revenue this year, according to research firm Newzoo BV. Kabam also owns studios in Los Angeles, San Francisco and Beijing.

Videogame deals have so far totaled $25.7 billion this year, with 87% spent on mobile-game developers, according to Digi-Capital LLC. The industry's previous full-year deal record was $14.9 billion in 2014.

The flurry of activity is being driven by the dwindling number of independent mobile developers with at least one solid hit, combined with expectations that mobile gaming revenue will eclipse that of computer and console games for the first time this year.

Just a handful of companies have figured out how to consistently mine revenue from games downloaded and played for free. Several of those have been acquired this year, including Supercell Oy, the Finnish maker of "Clash of Clans," for $8.6 billion by a group led by Tencent Holdings Ltd., and King Digital Entertainment PLC, creator of "Candy Crush Saga," for $5.9 billion by Activision Blizzard Inc. That has put a spotlight on the remaining successful developers, including Kabam.

"If you have a great game that's working and an interesting pipeline, there's an appetite from the market to have that," said Benchmark analyst Mike Hickey.

Closely held Kabam, based in San Francisco, has had several big sellers, led by "Marvel: Contest of Champions," which has generated $471.4 million in world-wide revenue since it launched in December 2014, according to industry tracker SuperData Research Inc. In all, Kabam ranked 17th in revenue last year among mobile-game publishers, SuperData said.

VentureBeat previously reported that Kabam had received offers for the Vancouver studio.

Kabam, with about 700 employees, was last valued at $1 billion in August 2014 and has raised $245 million from investors including Alibaba Group Holding Ltd., Google Ventures and Intel Capital.

Write to Sarah E. Needleman at sarah.needleman@wsj.com

(END) Dow Jones Newswires

October 19, 2016 18:25 ET (22:25 GMT)

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