Supercell CEO says company has 5 hit mobile games and killed 30 | VentureBeat

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Ilkka Paananen, CEO of Supercell, said in a post today that his Finnish mobile game studio has five hit games and it killed 30 over the years. But those five hits have made Supercell one of the most successful and lucrative game companies of all time.

Indeed, Clash of Clans has generated over $10 billion in lifetime revenue. Hay Day has exceeded $2 billion. In 2022, Supercell reported its revenue was $1.89 billion, or €1.77 billion, (-6% compared to the previous year), earnings before interest, taxes, depreciation and amortization (EBITDA) were $674 million, or €632 million, (-14% compared to the previous year), and the company paid $140 million, or €132 million, in corporate taxes.

“We view our financial performance as an outcome. If we are able to make great games and serve our players really well, the value that we create will also show in the financials,” Paananen wrote. “So we don’t focus on the financials. We focus our attention on our players and games – creating value. In a way, the financial results are somewhat of a mirror. They don’t tell us how to improve. They just reflect back to us that we can improve.”

It’s been four years, one month, and three days since the last game Brawl Stars shipped, he said. As far as I know, the only other company that has talked about its record of hits and killed games is Blizzard Entertainment.

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Paananen opened his annual letter by saying Supercell’s mission is to create great games that as many people as possible play for years and that are remembered forever.

“We’ve come to the realization that it is even harder than we ever thought. So, as someone at Supercell told me, we either try to figure this out or change our mission,” he wrote.

He added, “We repeat this to ourselves regularly. I worry a bit that someone at Supercell might throw something heavy at me if I say it again! It is a crazy, ambitious dream. Feels next to impossible to ever reach it.”

For Supercell to thrive and fulfill its mission, the company needs to both invent brilliant new games (regularly) and continuously improve those games for players, making something that already is great even better, he said.

“Doing just one of those two things is not enough. We want to do both,” Paananen wrote. “This feels like a daunting challenge. But, at the same time, as someone at Supercell just recently told me, we either try to figure out how to do it or we need to change our mission. We still believe in our mission, so let’s go.”

He noted that this is harder because in the last 20 or so years, something subtle but important changed in the games industry. In the past, the task was to create great games.

However, thanks to World of Warcraft, League of Legends, Counter-Strike, Puzzles & Dragons, Candy Crush Saga, Clash of Clans, PUBG, Fortnite, and many, many other great “forever” games (live service games), he said the company now has two simultaneous challenges. Once you create a great game, you have to maintain that great game forever while figuring out the next great game.

“I believe this two-pronged problem is the defining challenge for game companies over the next decade. It certainly is Supercell’s,” he said.

The challenges

Does a company with $674 million in profits have challenges? Well, sort of. The first big challenge is creating a great game that has a chance to become a cultural phenomenon.

Creating a great new game is bottling lightning, he wrote. At their core, teams that do this are trying to invent a game from scratch, a game that does not exist yet, that players don’t even know they want yet, but one with which hopefully millions of players will fall in love, he said.

Supercell’s approach has included:

When this approach works, it leads to success beyond the wildest expectations, with positive secondary effects, he said.

“We can attract even more great developers to join us. We can attract more players organically (more than 90% of our new users come in organically/unattributed vs. heavy reliance on advertising/UA),” he said. “This approach isn’t flawless. We have launched five hit games but we have killed 30-plus, by my latest count. We haven’t launched a new game globally since Brawl Stars on December 12, 2018. I’m not counting, but four years, one month, and three days seem like too long! Clearly, we can improve.”

He said he used to think that creating hit games becomes easier once you’ve “made it” and you have created your first ones. Well, it turns out the opposite is true, he said.

Creating a hit game is really, really hard, and requires a lot of luck too. But what is even harder is repeating this success. From a purely mental perspective, it seems easier to take risks and develop games “when you have nothing to lose,” he said.

“When our teams were developing Hay Day and Clash of Clans back in 2012, we obviously had no idea how big they could become. We just created the best games we could and put them out. These days, there is a lot more pressure,” Paananen said. “Of course, player expectations are higher, but I think most of the pressure comes from within. Sometimes, I have even thought that it would be easier to develop new games if we had no past successes. Sure, we feel extremely lucky and grateful for what we’ve accomplished in the past, but we need to try our best to focus not on what used to work in the past but what just might work in the future.”

It bothers him that it’s so hard to make more hits and he is not sure exactly what Supercell can do about it.

He said a very successful rap artist once told him that all you should focus on is just sitting on your butt, writing the best songs you can write, and eventually, the gods of hit songs will appear and drop the hit song on your lap.

And he said a chef from a world-famous restaurant known for extremely ground-breaking and innovative recipes told him he shares the recipes with his competitors. He does this to make sure he never repeats himself – it forces him to keep renewing what he does.

Maintaining live games

The second big challenge is serving players in a live game they love, so it’s played and remembered forever.

“Once we launch a great new game, I might argue it ceases to be ‘ours,’ and thereafter ‘belongs’ to players that love it. Some may only play for a day, but others may play for a decade. For those players, our neverending responsibility is to make a great game even better,” he wrote.

He said it feels more honest to list these challenges because this is definitely an ongoing process.

“Let’s start by putting ourselves in the shoes, so to speak, of a developer on a long-running game. Ask yourself: ‘how can you improve upon something that’s been continually improved for years, maybe over a decade?’ It’s an intimidating question,” he said.

His live game teams often say that they’re trying to always find the right balance between:

Of course, you are never at the right balance, he said, but you can always try to move towards what you think is the better balance. At its best, the game team tries to:

As he wrote about last year, his big mistake was that, for the longest time, Supercell applied the same thinking on team size to both new and live game teams. The live teams have grown a lot and continue to grow, but he had kept the post-launch teams too small, resulting in too much stress for devs. He said the company is still not where it ought to be and will continue to push on this front. There’s a combination of two factors that necessitates scaling a live game team:

As the game gets older, there are more areas that need to be modernized and rethought with fresh thinking for today’s players

As the game gets bigger, there are more new things made possible that would be great on top of what’s come before

While Supercell is motivated to improve its approach to serving players, he wanted to recognize the incredible work by teams over the past decade.

A few recent highlights:

So What Then?

“Good question. Let me be upfront: there are more questions than answers at this point. Writing this blog is very timely! Unfortunately, I can’t write how we’re going to solve the two-pronged challenge of destiny. I wish I could! However, I can write about what it might look like when we do?” Paananen said.

Supercell is known today for its mobile games, but perhaps thinking exclusively about mobile is too limiting, he said.

“We want to make the best new games, period. I imagine mobile will remain our most important platform for the foreseeable future, due to its reach, but maybe we need to draw inspiration from everywhere/anywhere innovation is happening,” Paananen said. “As we supercharge our new games development, we want to expand the number of really ambitious developers at Supercell, who can help us level up, dream big, and make things happen. We’ll merge fresh perspectives, experiences with different gameplay and technical challenges, with our own experiences and strengths. We have stepped up our efforts here. We are looking far and wide for great programming talent. So don’t be surprised if you see us at a games conference this year — please come and have a chat.”

He said the company will improve and expand its internal game engine, maybe even to rival third-party engines.

“It will enable us to make new kinds of games you have not seen from us,” he said. “And while we’ll still be known for our small teams, that won’t limit what we can do. Despite making great multi-platform games, we’ll figure out how to avoid the pitfalls of traditional PC/console triple-A development, maintaining our culture of independence and ownership.”

Growing live games

One or more of Supercell’s live games will reach a new peak, in terms of players or engagement or revenue, he said.

Those games will be steered by larger teams, unrestrained by anything except what’s best to serve players. Those teams will be built to develop both the fundamentals, expected by players and new surprises that may or may not work.

He said they will constantly improve development, tools, and workflow so the team can be more productive for players. And Supercell will train and grow more new developers to be future leaders and creators.

“At their best, these teams are developing and improving games in partnership with players. Their work is always useful and relevant, impacting millions of players daily,” he said. ” These teams will dream of how to make their games bigger and better over time, compounding incremental improvements with each update. Finally, to these teams, it’s always day one. No matter how long a game has been around, or how successful it has been, they always strive to make it better for existing and future players.”

New ideas and methods from new internal and external teams

Supercell continues to grow in Helsinki, which remains its biggest studio and where five live games were developed. The company has five new games in development there, with Squad Busters being the furthest along. At the time of writing this blog, the game is on a limited-time closed beta.

Supercell established its Shanghai Studio in 2018 and North America teams just a few months ago.

“My biggest message to the developers there: take big risks and be different from our Helsinki Studio,” he said. “Don’t try to be the second-best version of Helsinki. Build something different and additive. I’m excited for them to take up this challenge and can’t wait to see what comes.”

The company continues to invest in new studios and provide more capital when it sees promise. In addition to its three internal studios, Supercell has investments in 15 external companies. He cited the work of external studios including Channel37 (PC-first team of great devs), Metacore (makers of Merge Mansion and now the owner of Supercell’s canceled game Everdale), and HypeHype (making a no-code, mobile-first, games creation/sharing platform).

Remote team members

For the longest time, Supercell had an office-first culture. Even in the wake of the pandemic, the company returned to five days in the office pretty quickly in Helsinki.

“I think this is reflective of life in Helsinki. Where and how people live and work is unique and there didn’t seem to be any major roadblocks to returning to the office,” he said. “All that said, we have become a lot more open-minded about this and support hybrid, even fully-remote work to both attract the best people and retain them.”

He said that this remote-first approach is focused on the North American studio teams, who are all fully remote right now. In Helsinki, each team thinks slightly different about this, but overall, many of the teams will move in this direction in Helsinki as well.

“In fact, starting this month, the first fully remote positions in some of our teams will open up, where it is possible to be fully remote from certain European countries,” he said.

Paananen said not everyone in the team needs to have 10 or more years of professional game development experience.

For the longest time, Supercell has been very focused on building small teams of super-experienced developers, with 10 to 20 years of professional game development experience.

“While this has served us extremely well, and resulted in amazing games, we have realized that for us to build even better games in the future, our teams need to be more diverse and we also need younger talent,” he said. “By the way, and I want to be very clear about this, this does NOT mean that the bar for the new talent would be any lower. It just means that we emphasize more the level of raw talent, hunger and passion than mere years of experience. This is the group of people who will be an integral part of building the next chapter of Supercell.”

Other notes

According to Newzoo estimates, the mobile games market overall declined for the first time, at minus 6.5%. This is due to multiple factors, including “hangover” from accelerated pandemic-years growth and the impact of Apple’s App Tracking Transparency (which favors user privacy over targeted advertising), he said.

He noted that these are not Supercell-specific factors or even apply to it that much (e.g., the company is not heavily dependent on user acquisition, which was negatively impacted by ATT).

In 2022, Supercell removed its games from Russia and Belarus, consistent with sanctions issued by EU and Western countries. This was an important, difficult decision as the company had millions and millions of players in those countries and we also employ colleagues from Ukraine and Russia, he said.

“Naturally, this decision impacted also our financials but it was still the right call to make,” he said.

Supercell’s EBITDA decreased more than revenue did, due to increased investments in the future, some of which have been discussed in this post.

Supercell’s financial strength positions it to make big investments in the future and to truly think long-term. In an environment where many great developers across the industry are facing cost-cutting and layoffs, Supercell is very lucky to be able to continue to build and invest, he said.

What’s next?

Panaanen said the company has always wanted to build Supercell to outlast its founders.

“We dream for Supercell to be a company that makes creative, innovative, memorable games that bring millions and millions of players together. That’s why we kill so many of our own beloved games. We need to take bolder, bigger creative risks with our games,” he said.

Paananen said we have a limited time on this planet to dedicate productively/professionally, and we should spend it doing something of (relative) importance.

“We don’t cure disease, so we might as well try to make something of (relative) historic value,” he said. “Something new, different, delightful, and worthy of being talked about and remembered with love. Important games such as Pong, Doom, Mario, Zelda, Madden, FIFA, CoD, Starcraft, The Sims, WoW, Minecraft, League of Legends, Fortnite, etc. Games that ought to be remembered forever.”

The challenge outlined in this post is exciting and scary, he said.

“To achieve our mission, I cannot imagine a more fascinating challenge to solve. I’m honestly grateful for the opportunity to tackle it together with everyone else at Supercell. Evolving Supercell won’t be easy. It will require a very open, curious, and bold mind, not being afraid of change. With all the amazing people at Supercell, I think we have a really good shot,” he said.

He added, “This will define the next chapter of Supercell and I could not be more excited about it. Thank you to all of our players and the entire community. We will try our best to become better, that’s the least we can do for you.”


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