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Supercell, the developer behind one of the most consistently profitable mobile games, Clash of Clans — 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.
Ilka Paananen, co-founder and CEO, told the Financial Times that preparations to launch the Squad Breakers on Wednesday was “stressful” as the Tencent-owned company looks to land another billion-dollar hit.
“We haven’t played a game in a very, very long time,” Paananen said. “This is because our teams have very high standards. We kill lots and lots of games [before they are released]. Now we finally have our own game that has exceeded that quality bar.”
Supercell was an early mobile gaming success story, launching titles like Clash of Clans, Hey day and Clash Royale. It was valued at $10 billion in 2016 when Tencent, the Chinese internet group, took a majority stake.
But after reaching peak sales of €2.1 billion and €917 million in profit in 2016, Supercell’s revenue has declined in subsequent years.
Supercell’s revenue last year fell 4 percent from 2022 to 1.7 billion euros, while earnings before interest, taxes, depreciation and amortization fell 8 percent to 580 million euros.
Meanwhile, the $200 billion video game industry is facing its biggest slowdown in decades as growth driven by smartphone gaming and the latest generation of consoles hits its limits. Consumer spending on mobile games fell 2% last year to $107.3 billion. dollars according to Data.ai, which forecasts low single-digit growth in 2024.
Paananen said the mobile game industry as a whole has only had “six or seven” huge new hits since then Brawl Starsthe latest Supercell global launch in December 2018.
“The industry as a whole, and us included, probably needs to take more risk to do things that haven’t been done,” he said. “What needs to happen is more innovation, more risk-taking. This is the only way to grow the market.”
Squad Breakers is a title featuring characters from all previous Supercell games in which 10 teams battle it out in four-minute races. Paananen said the Finnish company first had the idea of ”mixing” its titles ahead of its 10th anniversary in 2020, but it took years to develop the right concept.
“Would we have released a game earlier? Of course. But are we proud to wait? yes Is it stressful? Of course it is,” he said.
Most game companies release hundreds of titles with one or two blockbuster hits and dozens of flops. Supercell, known for its “cells” of around 10 workers per title, promotes an alternative business model that has been widely imitated in the mobile industry: releasing a small number of games that are sustained for years with a constant stream of new features, characters and ideas for gameplay.
Clash of Clanswhich was released in 2012, remains one of the top mobile games in the world by user spend, according to Data.ai.
“We want to last more than 100 years as Nintendo,” Paananen said.
Paananen restructured Supercell last year, allowing existing games to have bigger teams – Clash of Clans now there are 100 workers — while those working on new titles remain fewer. There is currently a monster hunting game, mo.counder construction.
“There is so much untapped potential in the mobile gaming market,” said Paananen. “We are still scratching the surface. We need to think bigger, act bolder. And be okay with failure.”
