Kabam Inc. is selling the bulk of its assets to South Korea’s Netmarble Games Corp., effectively exiting the fast-growing but hypercompetitive business of creating games for mobile devices.

The deal, expected to close in the first quarter of 2017, gives Netmarble control over the Vancouver, British Columbia, studio that created Kabam’s most prized game, “Marvel: Contest of Champions.” The studio generates 95% of Kabam’s revenues.

Financial...