Supercell — the developer behind one of the most enduringly lucrative mobile games, Clash of Clans — has released its first title in more than five years as the Finnish company tries to revive its fortunes in an industry facing its biggest slowdown in 30 years.
Ilkka Paananen, co-founder and chief executive, told the Financial Times that preparing for the launch of Squad Busters on Wednesday was “stressful”, as the Tencent-owned company seeks to score another billion-dollar hit.
“We haven’t released a game in a very, very long time,” Paananen said. “That’s because our teams have very high standards. We kill lots and lots of games [before they are released]. Now finally we have our game that has exceeded that quality bar.”
Supercell was an early success story of mobile gaming, launching titles such as Clash of Clans, Hay Day and Clash Royale. It was valued at $10bn in 2016 when Tencent, the Chinese internet group, took a majority stake.
But after hitting peak sales of €2.1bn and €917mn profit in 2016, Supercell’s revenue declined in the subsequent years.
Supercell’s revenue last year slid 4 per cent from 2022 to €1.7bn, while earnings before interest, tax, depreciation and amortisation declined 8 per cent to €580mn.
At the same time, the $200bn video games industry is facing its biggest slowdown in decades, as the growth driven by smartphone gaming and the latest generation of consoles reaches its limits. Consumer spending on mobile gaming declined last year, down 2 per cent to $107.3bn, according to Data.ai, which forecasts low single-digit growth in 2024.
Paananen said the mobile games industry as a whole had only “six or seven” huge new hits since Brawl Stars, Supercell’s most recent global launch, in December 2018.
“The industry at large, and us included, should probably take more risk, to do things that haven’t been done,” he said. “What needs to happen is more innovation, more risk-taking. That is the only way to grow the market.”
Squad Busters is a title involving characters from all of Supercell’s previous games in which 10 teams fight it out in four-minute contests. Paananen said the Finnish company had first had the idea for a “mash-up” of its titles ahead of its 10th anniversary in 2020, but that it had taken years to develop the right concept.
“Would we have wanted to put a game out earlier? Of course. But are we proud that we wait? Yes. Is it stressful? Of course it is,” he said.
Most games companies release hundreds of titles with one or two blockbuster hits and dozens of flops. Supercell, known for its “cells” of about 10 workers per title, popularised an alternative business model that has been widely imitated in the mobile industry: release a small number of games that are maintained for years with a constant stream of new features, characters and gameplay ideas.
Clash of Clans, which was released in 2012, remains one of the world’s top mobile games by consumer spending, according to Data.ai.
“We want to last more than 100 years like Nintendo,” Paananen said.
Paananen restructured Supercell last year, allowing its existing games to have bigger teams — Clash of Clans now has 100 workers — while those working on new titles remain smaller. It currently has a monster hunting game, mo.co, in development.
“There is so much untapped potential in the mobile games market,” Paananen said. “We are still scratching the surface. We need to think bigger, act bolder. And be OK with failures.”
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