Unlock Editor’s Digest Lock for Free
FT editor Roula Khalaf will select your favorite stories in this weekly newsletter.
The CEO of Supercell, a manufacturer of popular mobile games such as Clash of Clans and Brawl Stars, is trying to buy successful new titles rather than attacking rivals and creating them.
Ilkka Paananen, co-founder and CEO of the Tencent-owned group, said that while the mobile gaming industry has been stagnating since 2021, other entertainment sectors such as books, music and television have grown. He said that.
“Some companies in our industry seem to have adopted an approach that it’s very difficult to launch new games. “They move to M&A strategies and whenever someone invents a new game, they’re in charge. , just buy it. I have a big problem with that idea.”
Paananen’s words weigh heavily as Supercell helped pioneer the free-to-play mobile gaming sector and helped create big hits like Clash of Clans, Hay Day and Clash Royale in the early days. Customers can play the game for free, but can speed up the action and spend money to access new characters and designs.
Last year’s Supercell enjoyed the underlying record of last year’s revenue of 2.8 billion euros, as all six titles recorded annual growth for the first time in a decade were recorded. It was valued at $10 billion in 2016 when China’s internet group Tencent acquired a majority stake.
Finnish Games Studio is famous for being selective about which games will be released, killing many possible titles because it hasn’t reached high standards. Pananen spoke about trying to make a game from a century ago, but Supercell released only one Team Busters in 2024 in the last six years.
Meanwhile, in recent years, a wave of integration has wiped out the industry. Take-Two Interactive acquired Zynga, the maker of Farmville, in 2022 for $13 billion. Meanwhile, Activision Blizzard, which itself took over by Microsoft, bought the studio behind Candy Crush in 2016.
Israeli Playtica and China’s Tencent both acquired a large number of small game makers. However, SuperCell itself bought several small game studios and last year bought all of the UK-based Space APE.
The CEO of Supercell admitted that “creating a new game in our space is extremely difficult.” He points to research suggesting that little time was spent on games created in 2024 in the last 12 months, but was spent on games created over six years ago. I did.
Supercell cuts its structure as it uses purely small “cells” of less than 10 people to work in the game. These cells still exist in the game under development, but six titles, including Boom Beach, are allowed to have more than 50 teams each.
Pananen said Supersel was “swimming for the current swim,” adding its workforce to 686 people last year. Video game giants like EA, Ubisoft and Sony Interactive all have over 10,000 workers, but have fired employees in the past year.
“The industry needs to see itself in the mirror. Why couldn’t we create a new, innovative gaming experience for our players? Taking more risk is part of our responsibility. ” Pananen said.
Recommended
His comments are as Supercell reported the second highest underlying annual revenue before interest, tax, depreciation and amortization, which increased 76% from 2023.
However, both EBITDA and revenue numbers differed until they were realized rather than purchased when reported with accounting standards that defer sales such as from in-game currency.
The reported figures were 1.96 billion euros on revenue, an increase of 15% from 2023 and 287 million euros on EBITDA, a drop of about 50%.
