Supercell (video game company)

Supercell Oy is a Finnish mobile game development company based in Helsinki, Finland. Founded on May 16, 2010, the company's debut game was the browser game Gunshine.net, and after its release in 2011, Supercell started developing games for mobile devices. Since then, the company has fully released five mobile games: Hay Day, Clash of Clans, Boom Beach, Clash Royale, Brawl Stars, which are freemium fast-paced games and have been very successful for the company, the first two generating revenue of $2.4 million a day in 2013.[4]

This article is about a video game company. For other uses, see Supercell (disambiguation).
Supercell Oy
TypeSubsidiary
IndustryMobile games
Founded14 May 2010 (2010-05-14)
Headquarters
Helsinki
,
Finland
Key people
Ilkka Paananen (CEO)[1]
ProductsSee § Games
Revenue $1.56 billion[2] (2019)
$577 million[2] (2019)
Number of employees
330[3] (2020)
ParentTencent Holdings (81.4%; 2016–present)
Websitesupercell.com

Following its rapid growth, Supercell opened additional offices in Tokyo, Shanghai, San Francisco, and Seoul. In 2016 the company was bought out by Chinese conglomerate Tencent holdings taking an 81.4% stake in the company valued at $10.2 billion USD.[5]

Company

Business model

Supercell focuses on the development of free-to-play games that yield profits through the in-game micropayments. The company's objective is to focus on the successful games that stay popular for years. The focus has not been on revenue, but on the principle "just design something great, something that users love."[6] Game development focuses around "cells" of five to seven people which start with idea generation and an initial review by CEO Paananen.[6] The team subsequently develops the idea into a game, which the rest of the company's employees get to play-test, followed by play-testing in Canada's iTunes App store; if the Canada reception is good, the next step is global rollout (via iTunes).[6] Supercell has discontinued a total of 14 game projects it did not deem promising enough, successful failures which are celebrated by employees.[6] One of the games that was cancelled well into development was Battle Buddies, which had also been rated well in the test market, but the number of players was still too small. The final decision for cancelling a project is done by the development team themselves.

Charity

The employees of Supercell donated 3.4 million euros to the Finnish New Children's Hospital project. Supercell has also given to the American charity organisation Watsi.

Supercell founders Mikko Kodisoja and Ilkka Paananen created the ME charitable foundation. In November 2015, the ME Foundation donated 2.5 million euros to the Helsinki youth department for the support of young immigrants. Supercell also organised a fundraising drive that collected old computers and tablets from games companies to donate to poor families with children through the Finnish Tukikummit Foundation, a registered non-profit organisation. Supercell was also the biggest individual investor in the crowdfunding campaign for the Finnish Game Museum in 2015.[7] Supercell helped preserve one million trees in the Lake Kariba ecosystem.[8] Clash of Clans players could purchase special red gems in game to support AIDS research.[9]

History

Background and founding

Before Supercell, two of its founders, Mikko Kodisoja and Ilkka Paananen, worked at Sumea, a mobile game company. Kodisoja co-founded Sumea in 1999, and Paananen was hired as the company's CEO in 2000. In 2003, Sumea made a profit of 1.2 million euros. In the following year, the American Digital Chocolate bought Sumea and made the company its Finnish headquarters and Paananen the European manager. Kodisoja, the firm's creative director left the company in 2010, followed soon after by Paananen.[10]

Paananen moved to venture capital company Lifeline Ventures, but wanted to create a game company where executives would not disturb the work of the game developers. Together, Paananen, Kodisoja, Petri Styrman, Lassi Leppinen, Visa Forstén, and Niko Derome who had known each other through work connections, founded Supercell in 2010. The company started its business in the Niittykumpu district of Espoo.[11]

Kodisoja and Paananen invested 250,000 euros in the company. Tekes, the Finnish funding agency for technology innovation loaned them a further 400,000 euros and Lifeline Ventures also invested in Supercell. The following October, Supercell raised 750,000 euros through seed funding including from London Venture Partners and Initial Capital. The first game Supercell started to develop was the massive multiplayer online game Gunshine that could be played on Facebook with a browser or on mobile platforms. The game prototype was ready in eight months.[11] After Gunshine's completion, Accel Partners also invested 8 million euros in the company in May 2011, and shareholder Kevin Comolli became a member of Supercell's board of directors. Accel also invested in Rovio, among others.[12]

Change of strategies

In November 2011, Supercell abandoned Gunshine for three reasons: it did not interest players for long enough, it was too difficult to play, and the mobile version did not work as well as the browser version. At best, the game had approximately half a million players. Supercell considered Zynga's market leadership in games on the Facebook platform insurmountable and so decided to focus on iPad games, cancelling a Facebook game it was developing. In order to ease concerns of Supercell's investors due to the change of direction, Paananen increased the detail of progress reports.[11]

The company simultaneously developed five games and the first to be released for public testing was Pets vs Orcs. This game and Tower were abandoned. In May 2012, Hay Day was published and eventually became Supercell's first internationally released game.[11] Hay Day was Supercell's version of Zynga's successful Facebook game FarmVille, an easy-to-play farm simulator. Supercell added to their farming simulator the ability to refine products, a production chain, and touch screen properties. The social aspect of the game was emphasised as well. In four months, the game became one of the most profitable games in Apple's App Store in the US, and was one of the most profitable in the world for two and a half years. The game receives regular updates and is maintained by a team of 14 people.[13]

Development of Clash of Clans

Lasse Louhento had started at Bloodhouse, and Lassi Leppinen was the chief programmer at Sumea and Digital Chocolate. Their team had spent months on a fantasy themed Facebook game when Supercell changed strategies. Leppinen and Louhento wanted to make a strategy game that would use a touch screen so playing would be as simple and pleasant as possible. The development of Clash of Clans took six months, and the game was released on August 2, 2012. In three months, it became the most profitable app in the US. According to App Annie, in the years 2013 and 2014 Clash of Clans was the most profitable mobile game in the world. The eponymous battle between the clans was added to the game as late as in 2014.[14]

In summer 2013, Supercell started marketing collaboration with the Japanese GungHo: the companies cross-marketed each other's games in their own games in their own markets. As a result, Clash of Clans became one of the most downloaded apps in Japan. GungHo's chairman of the board Taizo Son flew to Finland to thank Paananen and later introduced him to his brother Masayoshi Son, the CEO of the SoftBank Corporation. Soon, they proposed a corporate acquisition which indeed happened on October 7, 2013. SoftBank and GungHo bought 51% of Supercell's shares for 1.1 billion euros which is the largest price for a Finnish private company in history. In six months, Supercell's value had tripled, since in spring 2013 the company had sold 16.7% of its shares for 100 million euros.[15]

Both Clash of Clans and Hay Day were released in the summer 2012,[6] and Supercell did not release a new game in almost two years. The designing of the third game Boom Beach started in the autumn of 2012, and it was released in 2014. The new strategy game was released to the test market at the end of 2013, after which it went through large changes. The game was very successful in the US right after its release in March, but it did not stay at the top of the download charts for very long. However, it rose to the top 30 of the most downloaded iPhone apps after Supercell started an expensive marketing campaign in December 2014. In 2015, the game surpassed Hay Day in the charts.[16]

In March 2016, Supercell released its fourth supported game, Clash Royale, which uses similar characters from Clash of Clans. Between the releases of Boom Beach and Clash Royale, Supercell had discontinued multiple game projects, two in their test release phase. One of them was Smash Land which had been developed by 4 to 5 people for 10 months.[17]

In December 2018, Supercell released Brawl Stars globally, which was their fifth supported game and took 16 months from the original release.

Funding

Accel Partners and Index Ventures invested $12 million in the Series A of Supercell in 2011,[18] Atomico led the Series B investment,[19] and in October 2013 it was announced that the Japanese company GungHo Online Entertainment and its parent SoftBank had acquired 51% of the company for a reported $1.51 billion.[20] On 1 June 2015, SoftBank acquired an additional 22.7% stake in Supercell, which brought their total stake to 73.2% of the company and made them the sole external shareholder.[21] In 2016, Supercell reported annual revenues of around €2.11 billion.[22] In three years, the company's revenues have grown a total of 800 percent, from 78.4 million (2012). Supercell has funded a total of £143.3 million.[22][23][24]

Ownership

In June 2016, Halti S.A., a Luxembourg-based consortium founded that month, acquired 81.4% of Supercell for $8.6 billion.[25][26] At the time, Japan's SoftBank valued Supercell at $10.2 billion.[25] Halti S.A. was 50%-owned by Chinese technology company Tencent; in October 2019, Tencent increased its stake in the consortium to 51.2% by acquiring shares worth $40 million as part of a convertible bond.[26][27]

Games
Title Year Availability Description
Gunshine.net (later known as Zombies Online) 2011 Supercell's first game and only non-mobile game. It was a browser game that was released in 2011,[28] and its servers were shut down on November 30, 2012.[29]
Pets vs Orcs 2012 Pets vs Orcs was the company's first mobile game. It was downloadable for a little over a month in 2012.[30]
Battle Buddies 2012 The company's second mobile game, Battle Buddies was soft-launched in a number of countries in 2012, but was discontinued later in the same year.[31] The game was pulled out of market due to poor monetization, despite gaining positive reviews from critics.[32]
Hay Day 2012 On June 21, 2012, Supercell released Hay Day on iOS and on November 20, 2013 on Android.
Clash of Clans 2012 and 2013 (android) On August 2, 2012, Supercell worldwide released Clash of Clans on iOS and on October 7, 2013 on Android. The online strategy game where players build defenses and train troops to attack other players' bases, is the top grossing app of iOS and Android of all time. Clash of Clans has also received positive reviews from global audience. It has a score of 9/10 by Pocket Gamer and 4.5/5 stars from Gamezebo.
Boom Beach 2014 On March 26, 2014, Supercell released Boom Beach on iOS and Android.[33]
Spooky Pop 2014 The Canadian soft-launch of Supercell's addition to its mobile line-up, Spooky Pop, was released in December 2014 and discontinued in March 2015.[34] On February 9, 2015, the app was removed from the Canadian App Store and those with previously downloaded copies trying to access the game were met with a pop up message of the discontinuance. On March 10, 2015, the game was fully shut down.[35] Supercell has since been described as conservative on the release of titles after the successes of Clash of Clans and Boom Beach as opposed to many other mobile-development companies.[36]
Smash Land 2015 Smash Land was launched on a limited basis in Canada and Australia on April 1, 2015.[37] However, on July 1 of that year, Supercell announced on its official forum that it had decided to cancel development of the game.[38] Smash Land remained available for download until September 1, at which point it was permanently removed from online distribution platforms.[38]
Clash Royale 2016 On January 4, 2016, Supercell soft-launched Clash Royale on iOS and also on February 16, 2016, Supercell soft-launched the game on Android in Canada, Hong Kong, Australia, Sweden, Norway, Denmark, Iceland, Finland and New Zealand. On March 2, 2016, Supercell launched the game globally for iOS and Android.[39]
Brawl Stars 2018 On June 14, 2017, Supercell announced Brawl Stars via a video on YouTube. It received an iOS soft launch in the Canadian App Store the following day. It was released in the Finland, Sweden and Norway App Stores on January 19, 2018. The Android version was released on June 26, 2018 in Canada, Finland, Sweden, Norway, Denmark, Ireland, Singapore and Malaysia. The game was globally released on December 12, 2018, one and a half years after its first look.[40]
Rush Wars 2019 On 26 August 2019, a beta version of Rush Wars was launched in Canada, Australia and New Zealand.[41] On 5 November 2019, it was announced that the game would not be continued, and would shut down on 30 November.[42]
Hay Day Pop 2020 On March 16, Hay Day Pop was released in beta. The game is only available to certain countries such as Finland, Canada, Norway and others.[43] On November 30, 2020, Supercell announced that they will discontinue Hay Day Pop. The servers were shut down on February 1, 2021.[44]

Marketing

During Super Bowl XLIX in February 2015, Supercell spent $9 million for a 60-second runtime in front of 118.5 million viewers. According to The Guardian, the Clash of Clans advertisement was one of the most popular advertisements of the 61 spots aired on NBC.[45] The commercial, dubbed "Revenge", featured Liam Neeson parodying his character from the Taken film series by seeking revenge in a coffee shop for a random player destroying his village. The commercial has reached a total of 165 million[46] views on the game's official YouTube channel so far,[47] and it was the most watched commercial on YouTube in 2015.[48] Despite the success of the commercial, Supercell has seen only a marginal increase in downloads following the advertisement.[49]

Acknowledgements

In 2012, Supercell was awarded as the best Nordic start-up company[50] and chosen as the Finnish game developer of the year.[51] The following year, Supercell won the Finnish Teknologiakasvattaja 2013 (Technology Educator 2013) contest,[52] and the company was chosen as the software entrepreneur of the year. In 2014, the research and consultancy agency T-Media chose Supercell as Finland's most reputable company in their Luottamus&Maine (Trust&Reputation) report.[53]

Notes
  1. Takahashi, Dean (May 15, 2020). "The DeanBeat: Supercell CEO's 10 takeaways from 10 years of mobile games". GamesBeat. VentureBeat. Retrieved January 23, 2021.
  2. Takahashi, Dean (February 11, 2020). "Supercell's off year: revenues of $1.56 billion and profits of $577 million". GamesBeat. VentureBeat. Retrieved January 23, 2021.
  3. "Our story". Supercell. Retrieved January 23, 2021.
  4. Strauss, Karsten (April 18, 2013). "The $2.4 Million-Per-Day Company: Supercell". Forbes. Retrieved January 23, 2021.
  5. Perez, Matt (October 23, 2019). "Tencent Buys Majority Stake in 'Clash Of Clans' Developer Supercell". Forbes. Retrieved January 23, 2021.
  6. Strauss, Karsten (6 May 2013). "Is This the Fastest-Growing Game Company Ever?". Technology. Forbes (Paper). pp. 50, 52.
  7. "ajankohtaista – Sivu 3" (in Finnish). Suomen Pelimuseo. August 20, 2015. Retrieved December 4, 2016.
  8. "It's not just a game – Supercell brings climate action to Hay Day players". Compensate.com. Compensate. Retrieved 20 January 2021.
  9. "Clash of Clans, Angry Birds and more donate in-app purchases to charity". vg247.com. VG247. Retrieved 20 January 2021.
  10. Lappalainen, p. 167–168
  11. Lappalainen, p. 169–171
  12. Lappalainen, p. 172
  13. Lappalainen, p. 176–182
  14. Lappalainen, p. 183–187
  15. Lappalainen, p. 209–210
  16. Lappalainen, p. 195–199
  17. Graft, Kris (March 16, 2016). "Quality is worth killing for: Supercell's ruthless approach to production", Gamasutra. Retrieved March 17, 2016.
  18. "Supercell Raises $12M from Accel Partners". Business Wire. 2011-05-25.
  19. "Series B – Supercell – 2013-04-18 | Crunchbase". Crunchbase. Retrieved 2018-06-05.
  20. Clash of Clans maker Supercell raises $1.5bn to become the next Nintendo 15 October 2013
  21. Lunden, Ingrid. "SoftBank Ups Its Stake In Supercell To 73% As Sole External Shareholder".
  22. Pietarila, Päivikki (9 March 2016). "Supercelliltä hurjat luvut: liikevaihto harppasi 2,1 miljardiin". Kauppalehti (in Finnish). Retrieved 9 March 2016.
  23. Pietarila, Päivikki (24 March 2015). "Supercell meni kirkkaasti yli miljardirajan". Kauppalehti (in Finnish). Retrieved 24 March 2015.
  24. "Supercell Oy – Taloustiedot". Fonecta Finder (in Finnish). Retrieved 9 March 2016.
  25. Osawa, Juro; Needleman, Sarah E. (21 June 2016). "Tencent Seals Deal to Buy 'Clash of Clans' Developer Supercell for $8.6 Billion". Wall Street Journal. ISSN 0099-9660. Retrieved 1 August 2016.
  26. Tencent (21 October 2019). "Acquisition of Additional Equity Voting Interest in the Consortium Holding a Majority Interest in Supercell Oy" (PDF). Hong Kong Stock Exchange.
  27. Taylor, Haydn (23 October 2019). "Tencent takes majority control over Supercell". GamesIndustry.biz.
  28. Vilpponen, Antti (February 16, 2011). "Supercell Combines The Very Best In Finnish Gaming". ArcticStartup. Retrieved January 16, 2015.
  29. "Zombies Online/Gunshine.net Shutdown notice". Gunshine.net. Retrieved 8 April 2015.
  30. Seufert, Eric Benjamin (6 January 2014). "What is Supercell's strategy with Boom Beach?". Mobile Dev Memo. Retrieved 8 April 2015.
  31. Lappalainen, Elina (29 November 2012). "Epäonnistumistakin voi juhlia – Hittipeliyhtiö Supercell hautasi floppinsa samppanjalla". Talouselämä (in Finnish). Talentum. Archived from the original on 13 April 2015. Retrieved 8 April 2015.
  32. A first look at Supercell’s tablet-only combat title Battle Buddies 7 March 2012
  33. "Boom Beach is one of the most popular game on Google Play Store".
  34. "Supercell Cancels Spooky Pop".
  35. "Spooky Pop, Supercell's match-three puzzler, has been cancelled".
  36. "Clash of Clans". Clash of Clans. Retrieved 12 August 2015.
  37. "Clash of Clans Maker Supercell soft-Launches 'Smash Land' in Canada". 2015-05-04.
  38. "Smash Land Announcement".
  39. Clash Royale Soft Launch Announcement January 4, 2016
  40. AMA! Ask the Brawl Stars Dev Team Anything! : Brawlstars
  41. "Supercell teases new mobile game Rush Wars".
  42. "Rush Wars Closing". Supercell.
  43. "Welcome to the Neighborhood! × Supercell". Supercell. Retrieved 2020-06-09.
  44. Hay Day Pop [@HayDayPop] (November 30, 2020). "Unfortunately, we have made the hard decision to end the development of Hay Day Pop. Thank you for being an amazing community; we could not be more grateful. ❤️ You can find more information here 👇 supr.cl/TheFinalGoodbye" (Tweet). Retrieved January 23, 2021 – via Twitter.
  45. "Clash of Clans mobile game was most popular Super Bowl ad in 2015".
  46. Clash of Clans: Revenge (Official Super Bowl TV Commercial) on YouTube
  47. "'Clash of Clans' Is One Huge Hit".
  48. Juvonen, Anna (December 31, 2015). "Suomalaisyrityksen mainos vuoden katsotuin YouTubessa". Kauppalehti (in Finnish). Retrieved January 17, 2016.
  49. "Forget Liam Neeson and Kate Upton — even the 'worst' Super Bowl game ad worked". 2015-02-12.
  50. Laakso, Leena (December 10, 2012). "Supercell voitti startup-kilpailun", Kauppalehti (in Finnish). Retrieved on March 26, 2016.
  51. Rautio, Maria (November 2, 2012). "Vuoden suomalainen pelinkehittäjä valittiin – lahjoitti koko summan Movemberille", YleX (in Finnish). Retrieved on March 24, 2015.
  52. (10 October 2013). "Supercell voitti, Vexvelle kunniaa", Talotekniikka (in Finnish). Retrieved on March 24, 2015.
  53. Mäntylä, Juha-Matti (September 12, 2014). "Suomen hyvämaineisimmat: Supercell, Kone ja... kolmatta et muuten arvaa", Talouselämä (in Finnish). Retrieved on March 16, 2015.

References
  • Lappalainen, Elina (2015). Pelien valtakunta: miten suomalaiset peliyhtiöt valloittivat maailman? [Game empire: how the Finnish gaming companies conquered the world? Google Translate] (in Finnish). Atena. OCLC 918792916.
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