Supercell makes $852M on $2.24 billion in 2021 revenue

Supercell reported its revenues hit $2.24 billion (€1.89 billion, up 51%) and before-tax profits of $852 million (up 84%) for 2021, compared with $1.48 billion in revenue and before-tax profits of $463 million a year earlier.

And for the first time, Supercell’s cumulative revenues to date from Clash of Clans and Clash Royale alone have grossed more than $10 billion. That’s pretty amazing, considering the company’s has only five titles published to date: Clash of Clans, Clash Royale, Brawl Stars, Boom Beach, and Hay Day.

Helsinki-based Supercell publishes its financial results once a year per Finnish law, and it noted that it happily paid $177 million in corporate taxes in Finland last year. The before-tax profits of $852 million are earnings before income taxes, depreciation, and amortization (EBITDA).

In terms of lifetime results over 11 years, Supercell’s games have each grossed over $1 billion in revenues and have had five billion downloads. The games currently have 250 million monthly active players. And while these results are enviable in gaming, the company remains humble about its performance.

“Are Supercell’s best days behind us or ahead of us?” said Ilkka Paananen, CEO of Supercell, in a blog post. “We asked ourselves this simple question at the beginning of last year which led to a very deep discussion where we realized that we had not evolved quickly enough to keep up with the demands of players around the world. In this post, I’ll explain what we’re doing about it and tell you about the big mistake I made.”

Paananen said that he was surprised to learn that “developing and operating hit games does not become any easier even when you’ve been able to release a few.” He said the company couldn’t have dreamed of its success when it started in 2010. But he noted the games had not really grown that much in the past few years, and Supercell still has not launched a new game since Brawl Stars went global in December 2018.

The company pondered this challenge, and it led the company to changing its thinking and approach on several things, Paananen said.

Supercell’s dream

Supercell’s dream is to create games that as many people as possible play for years and that are remembered forever. But Paananen said the team started to challenge many assumptions through the lens of this dream.

“In hindsight it of course sounds completely obvious, but we concluded that in order to keep chasing our dream, we simply need to do better for players,” said Paananen. “We noticed that we had been so stuck in some of our old beliefs, that in some cases we had not been able to fully deliver for our players.”

One of the company’s fundamental practices was to build games using small teams, or “cells.” Paananen said the company always believed that its success was related to the fact that it had small teams. Those teams take bigger risks and move faster with fewer cooks in the kitchen and less process, he said. That’s a big help when making something brand new from scratch. Right now, the company has about 360 employees, compared to about 340 last year. That’s pretty small compared to other big game companies with similar financials.

“However, the situation changes once a game team starts heading towards beta and becomes a live game team,” Paananen said. “All of the sudden, the priority shifts from innovating to serving an audience of millions of players, and doing so in a healthy and sustainable way, without overworking the people in the team.”

He said Supercell realized it had made the mistake of applying the exact same thinking to both new game teams and live game teams.

“In extreme cases, we stuck to our mantra of ‘small teams’ because that was our culture, and had not realized that our culture should really be at the service of players,” he said.

He added, “Ultimately, this of course was my mistake. As the CEO, I should have challenged our existing ways of thinking and culture, because as I had written in our culture document a few years back, ‘what got us here will not necessarily get us there.’ I realized that I was actually the one who had the fixed mindset, stuck in the thinking from our past. Definitely one of the biggest mistakes of the many that I’ve made in my career, and one that I will remember forever.”

Big and small teams

Today, when the company considers what is the right size for a team, Supercell doesn’t necessarily default to small. The answer depends on what type of game the team is working on and what phase it is in. It is still learning and trying to find the right balance between “small” and “doing more”.

So far, the answer has been to move to slightly larger teams for live games, developing better and smarter tools and technology, creating stronger outsourcing pipelines, and thinking outside the box as with the Supercell MAKE platform, he said.

“And yes, I am fully aware that ’20 to 35 people’ is still a relatively small team compared to the teams of several hundred people that exist in our industry. But for us, they feel big,” Paananen said.

But the company will keep one important pillar of its culture, which is that teams continue to operate independently. Paananen still considers that to be “sacred in Supercell’s culture.” The role of leadership is to put together the best teams and then fully trust them and not tell them what to do. The teams operate as fully independent companies.

Supercell also saw that doing more for players could impact the health of the teams. Those teams with high ambitions and small team sizes — operating during remote work due to COVID — sometimes led to teams pushing themselves too hard to deliver on their plans.

“In a few cases, extra content for the players came at the expense of peoples’ health and even led to symptoms of burn out,” Paananen admitted.

He said this “kills me” because it’s wrong for the people and their families and it is too common in the games industry. He said it is a direct violation of the mission to create “a company and games that would last for decades – obviously we cannot do that if people burn out.” And he said the company was founded to be the best place for the best people and teams to make the best games.

“Again, if people burn out while creating games that obviously is very far from being the best place for them,” he said. “So again, we had a discussion about this and concluded that whatever the team does, doing more for players cannot come at the expense of the team’s health. Overworking teammates cannot be the solution. No one should sacrifice their health and wellbeing for their team or Supercell goals. That means we need to do a better job building teams that are healthy and sustainable for the long term.”

That means the company will grow the teams responsibly and make sure that people on teams can work reasonable hours and take enough time off to fully recharge.

“We are seeking to reduce the stigma around talking about mental health at work and encouraging discussions within teams to explore healthier ways to work together and deliver the best for the players of our games,” Paananen said. “All in all, we are playing the long game here. I am confident that the discussion and actions we’ve taken will get us closer to having the healthiest people and teams in gaming, while also delivering much more for our players.”

Improvement mindset

To improve, the company aims to get better every day and always strive to be better no matter how great a game or team already is.

The company will be bold and take risks. That will lead to missteps and failures, but learnings will make the team stronger. But it doesn’t simply mean the company wants to grow its revenues.

In 2021, the improvement mindset was all about trying to do better and be bold in trying new things. he noted Farm Pass launched in 2020 and it improved over time in its first full year. Clash of Clans introduced Town Hall 14 that improved the experience for longtime players. There were similar updates with the other games.

The most live beta games in ten years

And Supercell now has three live games in beta testing. That is the most since 2012, the year that the company launched Clash of Clans and Hay Day. They are very different from the existing games.

Everdale is a peaceful and relaxing building game with never-ending adventures. It launched into beta back in August and the player reception has been “incredible,” Paananen said.

Supercell also announced three Clash games at once and openly spoke about the roadmap including two games that were not yet in beta, and could even be killed before they get to that point.

Since the announcement, two of these three gone into beta.

“We’ve never announced titles this early in their development phase, but we felt like this was a great opportunity to be more transparent with players,” Paananen said.

Backing like-minded game studios

Paananen also said the company has invested in 14 like-minded game development studios.

“This is one of the ways we can do more for players – bring them more great games also outside of the Supercell internal studios,” he said. “I am particularly excited to see the momentum behind Merge Mansion from Metacore, Love & Pies from Trailmix, and Beatstar from Space Ape.”

Beatstar, a rhythm game by Space Ape Games, launched 31 August and has reached No. 1 in downloads in 24 countries and is the top grossing music game globally. With over a billion song plays, it is emerging as an important platform for music discovery, he said. And Space Ape has also soft launched Boom Beach Frontlines, a team shooter set in the Boom Beach universe.

Merge Mansion from Metacore reached over 20 million downloads and “the internet fell in love with Grandma Ursula who was played by Cathy Bates in a series of films that they released,” he said.

Love & Pies, created by Trailmix, reached over a million installs in the first three months and won the TIGA Award for best Casual game in 2021.

“We have been helping support the teams through a combination of backing them financially and hands on support when they’ve asked for it. In addition we have been learning so much from these amazing teams,” Paananen said. “And this is just the beginning from this amazing group of game studios, there is definitely more to come.”

Expanding talent with Level Up

Historically, Supercell tended to hire for the most part only very experienced developers, but now the company said it is important to learn from younger talent. To that end, it started the Level Up program which brings six recent graduates together to develop a playable game over six months.

The program has just started and it’s incredible to see the talent that applied and joined, Paananen said. Whenever possible, the company has also been more open for younger talent for other open permanent positions.

Supercell also recently announced that it is looking for founders to help start a North America-based game studio.

More financial results

Paananen said that many of the team who have benefited from free education and healthcare financed by taxes feel proud that they can contribute to society with the taxes aid by the company, in turn helping others.

“We also try to maintain a positive impact on society by offsetting 200% of carbon emissions from our operations as well as 100% of those created by mobile devices while players enjoy our games,” Paananen said.

While these results represented some growth over last year, he said the company doesn’t like to focus on results from any particular year. Instead, it focuses on the long term.

“Our inspiration comes from companies like Nintendo who built their company over 100 years,” he said. “For us, the most important thing about financial results like these is that they enable us to keep investing in making even better games, taking risks and better serving the over 250 million people that play our games every month.”

Doing more for players going forward

Paananen said Supercell will focus on doing more for players this year. Hay Day and Clash of Clans will both turn ten years this year and there will “of course be big celebrations for both, alongside lots of great new content and some exciting new features which I can not yet talk about,” he said.

The Clash Royale team has big plans as well, including ensuring players of all skill levels are rewarded for their time in game and making it more exciting to explore and expand their collection. The Brawl Stars and Boom Beach teams are also hard at work and focused on delivering for players, he said.

The teams will continue to iterate on the three games in beta, trying to make them better for the players.

“If at some point our teams think they are ready to go global, the next would be our sixth launch in twelve years so it would be a big moment for us. However, our teams keep their bar very, very high so no promises,” he said.

Supercell also currently have seven new games at various stages in development. Each of these new games will bring a new level of creativity and something very unique to players, he said. More will come from the 14 game studios that Supercell has backed.

Paananen closed with a thank-you note to players, saying, “The community inspires us to challenge ourselves to be better every single day. We know there are many many games out there to play and we are humbled that so many have continued to play our games for so many years (this year it will be ten years and counting!). We will always strive to improve the experience and we hope the players will continue on this journey with us.”

Originally appeared on: TheSpuzz