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Kabam has confirmed a report that it laid off about 25 people, or 3.5 percent of its global workforce, at its San Francisco mobile game studio.

The news, first reported in Gamasutra, shows that the $36 billion mobile game industry is still a difficult business even for a company that has games based on popular Marvel and Warner Bros. properties. Kabam makes games such as Marvel: Contest of Champions.

In a statement, Kabam said, “[Our] business strategy is to focus on fewer, bigger, and bolder triple-A mobile games. We have made the difficult decision to reduce the size of our San Francisco-based studio. While we are making several large investments in a new slate of games in multiple locations, we must also be mindful of costs. We are extremely grateful to all the employees who have contributed to the longstanding history of Kabam¹s San Francisco studio. This hard but essential decision allows us to stay focused on our mission to create the world¹s favorite massively multiplayer free-to-play games.”

Kabam added, “But we can also say that the layoffs were isolated to our San Francisco studio affecting approximately 25 people, which represents 3.5 percent of Kabam’s worldwide workforce. We are planning to hire an even larger percentage of employees over the next six months across our global offices to support both new announced and unannounced game titles, particularly in our Los Angeles and Vancouver studios.”

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Kabam previously laid off about 8 percent of its staff about six months ago, and it also parted ways with some employees as it sold off some of its older games to China’s Gaea Mobile. Kabam said it is spending about $14 million on every mobile game it makes.

More recently, Kabam launched its Marvel: Contest of Champions game on iOS in China. That game saw initial success in hitting the top downloads list, but it has since declined in the rankings.

Kabam noted that the layoffs did not affect its Beijing studio, which made the Chinese version of Marvel: Contest of Champions.

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