Kabam Pulls In a Giant $30 Million Funding for Massively Multiplayer Social Games

The day of mega-fundings in the social game space is not yet done. Kabam, formerly known as Watercooler, is announcing a big $30 million funding today led by Redpoint Ventures and Intel Capital, with previous investor Canaan Partners also returning.

Kabam is a bit of an odd man out among the well-funded social game companies. With 7.7 million monthly active and 1.1 million daily active users, it’s several times smaller than a competitor like Playdom, which raised $33 million last June on about 42 million MAU and 6 million DAU.

CEO Kevin Chou considers his company part of a different breed. “Our games don’t really aggressively push the Facebook viral channels, it’s about creating great content,” he says. “We’re much more focused on serving an existing userbase than pushing our DAU numbers higher. Everyone in the industry knows that there is a relatively small percentage of players that actually pay, so you can have a much higher MAU / DAU and not make as much as another company.”

Venture capitalists aren’t great judges of potential quality or creativity, of course. What they can evaluate is technology, which is the other side of Kabam’s story. Right now, Kabam’s only big hit is the strategy game Kingdoms of Camelot, while its next two largest games, Dragons of Atlantis and Glory of Rome, follow in a very similar mold.

These titles all emulate a genre whose rules and typical gameplay were defined much earlier by games like Travian. But Chou envisions a technological evolution toward ever-larger worlds. “We’re really interested in this idea of real time, synchronous gameplay experiences where hundreds of thousands of people are interacting in real time with each other,” he says.

In the typical online strategy setup, players split onto different “shards”, or worlds run on separate servers. Thus multiplayer games can scale from a handful to a few thousand players, but not over that number. Chou thinks Kabam can figure out how to create a single, persistent world containing all its players, though.

“Those are things that are pushing the envelope in terms of massively multiplayer games,” he says. “It’s not something we have in the market today, but it’s something that crazy smart technologists out there are talking about. And consumers are saying they want experiences where they interact with even more people.” The scaling challenges and high server costs incurred by this model are the reason for Intel’s investment, according to Chou.

Besides continuing to add new creative elements to its games and working on the tech, Kabam also plans to continue growing — it’s currently over 250 employees — and potentially make more acquisitions, as with its October acquisition of WonderHill, which netted it Dragons of Atlantis. It’s also looking at continuing its experimentation on Facebook (as with Hero Force) and branching out to mobile.

And while all this is going on, Kingdoms of Camelot, which has been around for well over a year, is not suffering the same decline other social games have experienced. After reaching of 6.5 million MAU peak last September, it has settled down to the six million MAU range and, for the most part, stayed there. Quite a few users have more than a year under their belt, according to Chou, and seem happy to stick around.

Kabam had previously raised $9.5 million between its first and second rounds of funding.