Earlier this week, the privately-held, social and mobile gaming company, Kabam Inc., revealed that Warner Bros Entertainment Inc. and MGM Studios Inc. had joined forces with an undisclosed amount invested in it. Based in San Francisco and with offices in the United States, China and Luxembourg, Kabam was founded in 2006 and is known for its popular "Kingdoms of Camelot" strategy games.

Competing with gaming companies such as Zynga (News - Alert) Inc and Kixeye, this game allows players to build castles and battle troops in a medieval setting. Kabam focuses on mid-core games, which are immersive games that sit between slickly produced titles like Activision (News - Alert) Blizzard Inc.'s Call of Duty and casual games such as Zynga's bread-and-butter FarmVille.

The company added that President of Warner Bros. Home Entertainment, Kevin Tsujihara, will join Kabam's board of directors as a member and Gary Barber, MGM's CEO and chairman, will join as an observer on the board.

Through its investment fund called Time Warner (News - Alert) Investments, the parent of Warner Bros., Time Warner Inc., has previously made investments in game studios such as CrowdStar and Trion Worlds. Featuring an interactive division that published the "RoboCop" action-shooter game for consoles and PCs in 2003, last year, MGM Studios emerged from bankruptcy after signing a distribution deal for two James Bond films, including the recent hit “Skyfall.”

Image via Shutterstock

Before signing the latest investment deal, the three companies have previously worked together. Based on Peter Jackson's "The Hobbit Trilogy" that was produced by MGM and New Line Cinema, Kabam partnered with Warner Bros' interactive division over a year ago, to co-develop "The Hobbit, Kingdoms of Middle-earth" mobile game.

For release early next year, Warner and Kabam are developing a second Hobbit game known as “The Hobbit: Armies of the Third Age.” On December 14, the first of three planned "The Hobbit" movies will be released. Previous investments have been made in Kabam by Google Ventures, Intel (News - Alert) Capital, Canaan Partners and Redpoint Ventures.

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