Text: Snow Leopard Finance Club Liu Yimo
In 2012, Finland giant Nokia announced that it would lay off 10,000 employees.
Some of these 10,000 people went to Nordic gaming and tech companies, which the media called "Nokia's gift to Finland start-ups". Supercell, which is headquartered in Finland with Nokia, is one of them. In the same year, two of Supercell's mobile games were launched and have been in operation ever since, with revenues exceeding $100 million that year, ranking seventh among the world's mobile game manufacturers.
This is the story of a whale falling into life.
Prior to May of this year, Supercell had only released a total of five mobile games, but it had never been a failure. "Clash of Clans", "Cartoon Farm", "Boom Island", "Clash Royale" and "Brawl Stars", each with more than $1 billion in revenue, are all in operation to this day. In 2024, Supercell will have just over 600 employees, and Konami, a similarly ranked Japan game company in terms of revenue, will have 8,857 employees in 2023, more than ten times as many as the former.
Prior to the release of the latest Squad Busters, the 15-year-old gaming company hadn't released a new product in six years. It's likely to set a record for the longest time since a new game has been released, but it's still in the top 10 mobile game companies in the world.
People tried to find out the secret of Supercell's success, and in the process, discovered many similarities between it and Nintendo, a long-established game company in Japan.
For example, the product requirements are extremely strict, and failure is nipped in the embryonic stage - every time a project that fails to meet the standard is cut, we will drink champagne together to review; Relax authority in management and give the team more autonomy. From media interviews to annual letters, Supercell executives habitually talk about Nintendo.
Nintendo, a century-old giant, is the next stop for this small but beautiful Nordic company.
Six years of waiting for "Burst Squad"
After 6 years, Supercell's new game "Burst Squad" has finally been released, and it has high hopes.
Before its launch, "Burst Squad" had more than 30 million reservations. Supercell's CEO, Ilkka Paananen, said in last year's annual letter that Supercell is entering the "Next Chapter" and hopes to be a company that makes creative, innovative, memorable games that bring millions of players together. And "Burst Squad" is the first game in Supercell's new phase.
Burst Squad is a battle royale-based smash brawl game that blends roguelike and MOBA mechanics. In a single game, 10 players grow their squad and collect gems in a variety of ways, determining the winner by the number of gems.
"Burst Squad" game screen Source: Supercell
In its first week of launch, Burst Squad surpassed 30 million downloads, making it the fastest game product to reach 5 million downloads. According to Sensor Tower data, the cumulative revenue of "Burst Squad" reached $28 million in the first three weeks of its launch. For comparison, Supercell's most profitable game, Clash of Clans, earned $26.4 million in revenue for the full month of June (AppMagic data).
According to the estimation of BOCOM International Securities, the turnover of "Burst Squad" in June was 280 million yuan, which was one of the main sources of overseas revenue for Tencent Games that month. In an interview with foreign game media GamesIndustry.biz, Supercell's head of games, Eino Joas, called it "our most successful game released so far".
According to game analyst Philip Black, BlastSquad is not only the least difficult game to pick up among Supercell's games, but also has the most sustainable monetization potential outside of Clash of Clans.
According to Diandian data, as of July 15, "Burst Squad" has a score of 4.4 on the App Store in the United States and a Google Play score of 4.3.
In Burst Squad, Supercell brings together many of the classic characters from previous games. Game director Eino Joas said in an interview with foreign media GamesIndustry.biz, "It's Supercell's All-Star Smash Bros."
The Super Smash Bros. series is the originator of Smash Bros. games, including many IPs and popular characters of Nintendo. Its producer Masahiro Sakurai said in an interview with the United Kingdom "The Guardian" that the game is simple and easy to play, so that non-fighting players can also experience the fun of the game. According to Nintendo's financial report released in May this year, "Super Smash Bros. Special Edition" is the third best-selling game on the Switch console, with sales of 34.22 million copies.
While Blasts Squad has received a lot of critical acclaim, there have been other reviews that have pointed out its ceiling.
Game analyst Philip Black believes that a boring gameplay loop may have left BlastSquad lacking depth. TNW Conference, a foreign technology media, wrote in the review, "Unlike Supercell's previous works, which required strategic thinking, "Burst Squad" feels one-dimensional and lacks diversity. ”
Since Tencent is the largest shareholder of Supercell, the Chinese server versions of Supercell's first five games are all published by Tencent. For example, Brawl Stars was launched on the national server a year after it was launched overseas, and the casual game Hay Day was launched on the international server in 2012 and only opened its open beta in China in May this year. In 2018, Supercell set up a studio in Shanghai to develop games like Clash Mini.
After the official release of "Burst Squad" on May 29 in most markets around the world, the national server version is already on the way. Although it is not among the three import version approval announcements in the first half of this year, it is a high probability event to get the version number in China in the second half of the year. Considering that the localization and operation of Supercell's works are in cooperation with Tencent, language and localization will not be an obstacle.
Tencent Games announced at its annual press conference on May 28 that "Burst Squad" has opened pre-orders for the national server, and will start recruiting test players from July.
As of July 15, in the domestic game community TapTap, the expectation value of "Burst Squad" is 7.6, and the number of reservations has approached 100,000.
The human efficiency is 1.6 times that of Pinduoduo
Few game companies have been able to produce a hit like Supercell.
Each of Supercell's five games prior to Exploding Squad had accumulated more than $1 billion in revenue. Among them, "Clash of Clans" has generated more than $10 billion in cumulative revenue, and "Cartoon Farm" has generated more than $2 billion. As of 2021, Supercell has more than 5 billion total downloads of all games, with more than 200 million monthly active users in 2024, while Supercell's Finland population is less than six million.
According to App Annie, a data analytics platform, in 2014, Supercell topped the list of global mobile game publishers. At that time, Supercell was only 5 years old and only had 3 games under its umbrella. In the six times since, Supercell has also ranked in the top 10.
Longevity is the label of Supercell games.
According to a white paper released by SuperScale, an overseas game service company, 83% of mobile games have a lifespan of less than 3 years. Supercell's top five games have been around for nearly 10 years on average. According to AppMagic data, Brawl Stars, which has been released for five and a half years, ranked 11th in the global mobile game revenue list in June.
In terms of human efficiency, Supercell's results are also outstanding.
According to Supercell's official data, Supercell has only more than 600 employees, but it will generate revenue of 1.7 billion euros in 2023, with an average value of about 2.8333 million euros per employee (about 22.3833 million yuan at the exchange rate of 1:7.9 between the euro and the yuan).
In contrast, Pinduoduo, which is recognized as having a high human efficiency ratio, has a revenue of 247.639 billion yuan in fiscal year 2023, according to Flush iFinD data, as of the end of last year, Pinduoduo had 17,403 employees, with an average value of about 14.2297 million yuan per employee, and Supercell is about 1.6 times that of it.
Such a company has attracted the attention of many entrepreneurs.
Zhong Hua, the former chief architect of Alibaba, wrote in the book "The Way of Enterprise IT Architecture Transformation" that in 2015, under the guidance of Masayoshi Son, Jack Ma led a group of executives to visit Supercell. They found that Supercell's mid-office capabilities could support a "cell" team of no more than seven people to quickly launch new games and make trial and error, much to the surprise of Jack Ma and others.
Just six months after its trip to Finland, Alibaba launched its middle office strategy. It was Daniel Zhang, who later became the CEO of Alibaba, who proposed and promoted the "big middle office, small front office" middle office strategy.
Among Supercell's loyal players is Tencent President Martin Lau.
The Wall Street Journal recorded an interesting detail that Martin Lau was a heavy player in Clash Royale when it was released in 2016. After a meeting, Supercell's CEO, Panaanen, said, "Mr. Liu just dropped out of Clash Royale's Top 100 list, and it's almost impossible for him to turn his attention back to what we have to discuss. ”
In June 2016, Tencent announced that it would acquire an 84.3% stake in Supercell, the developer of Clash of Clans, at a valuation of $10.2 billion, at a transaction price of $8.6 billion. It set a record for the largest acquisition amount of a global game company that year.
According to Bloomberg, Tencent even borrowed $3.5 billion to buy a stake in Supercell, and it first finalized the acquisition and then formed a buyer group. Some media use "whale swallowing" to describe this acquisition: in 2014, Tencent acquired a 15% stake in JD.com, and only paid $215 million.
The acquired Supercell was promised to operate independently, but still had its own troubles.
After peaking at $2.33 billion in revenue in 2015, Supercell hasn't been able to return to or surpass that number. In 2024, in an annual open letter titled "Comfortable Feeling Uncomfortable", Supercell's CEO Panaanen summed up the difficulties the company faced with the keyword "change": Supercell faced the dual challenge of growing existing games and creating new ones, "You'd better have great things until you run out of money, which is really difficult for us".
Nintendo's cultivation guide
Behind Supercell's commercial success is a demanding approach to its products that is difficult for many manufacturers to replicate.
In an interview with the gaming media mobilegamer.biz, CEO Panaanen said that day 30 retention and long-term retention are the most important metrics. Of the 10 games developed at the same time as Clash Royale, seven were strangled in the creative prototype stage and two were closed during testing, leaving only Clash Royale to the end.
The same thing happened with Burst Squad. Since 2018, there have been 6 games that have gone to the eve of the open beta with "Burst Squad", but only "Burst Squad" has passed the criteria for official launch and finally released.
Supercell has a special corporate culture where every project is cut and a champagne review is sipped. "Every failure is a unique learning opportunity, and every lesson ultimately leads us to do better." Supercell's CEO is like, "For creative teams, not taking a risk is the biggest risk." ”
Nintendo has a similar obsession with its products.
In the early '80s, when Nintendo entered the video game industry, it needed a high-quality title. Shigeru Miyamoto, who later became a legendary game planner, was still unknown at the time, and many of his ideas were rejected by the head of Yokoi Junhei and Engineers, and many of the game's content, from the plot background to the protagonist's hat and nose, were repeatedly revised, and the game's name was also questioned internally.
Eventually, Donkey Kong, released in 1981, became Nintendo's first sensational entry into the world of video games, featuring the later Mario.
Structurally, both Supercell and Nintendo focus on teams rather than individual projects.
After the organizational change in 2015, Nintendo's game development team consisted of teams, most of which had their own long-term IP, and finally came under the unified management of Nintendo Entertainment Planning &Development (EPD). For example, the third group is known for developing the Legend of Zelda series, and the fifth group is known for Animal Crossing and Fitness Ring Adventure. ACCORDING TO GAME MEDIA NAAVIK, NINTENDO'S NINE EPD GROUPS, EIGHT OF WHICH HAVE AT LEAST ONE GAME SOLD MORE THAN 14 MILLION COPIES.
Nintendo President Shuntaro Furukawa made a judgment on the earnings call in May this year: game development will inevitably become "more lengthy, complex and sophisticated" in the future, requiring more people to carry out the development work.
Supercell started out by product line, with each team developing their own games, with a core of five and no more than seven in the early days — the architecture that Jack Ma saw in Helsinki.
This year, Supercell began an organizational change with a new way of forming teams called Team Lab, known internally as Spark. The core mechanics of Team Lab are team-centric rather than individual game projects, and these teams are given greater autonomy. "Team Lab is about building the best possible team...... We don't give the green light to ideas, we give the green light to the team. ”
Brawl Stars game interface Source: Supercell
According to GamesIndustry.biz, it is up to the game production team to test the release of the game in several countries, try different operational strategies, and ultimately release or abandon the project, rather than executives or outsiders.
According to the game industry media "Mobile Game That Little Thing", in the first four months of Supercell's Shanghai studio, no one at the headquarters in Finland asked about the operation of the team. Fang Fan, the person in charge, spent two hours making a simple PPT to report to the headquarters, and the feedback was: "Don't spend so much time on PPT in the future, you don't need to do PPT, just talk about it directly." ”
That's why Paanan often refers to himself as the "weakest CEO." He said his goal is to remove obstacles in the way of the game team, and ideally, he will "make zero decisions."
Nintendo President Shuntaro Furukawa also said in an interview with the Japan Economic News that Nintendo's most important thing is to provide global customers with unique gameplay that has never been experienced, which is the only standard, and developers should not care too much about what to do if they fail. "The president's main task is to create an environment where people can make the most of their abilities, and game development is left to a trustworthy person in charge who can distinguish between good and bad."
On Jobtalk, a forum where Japan game workers gather, someone launched a campaign to "old employees rate the workplace environment of the former company", and Nintendo ranked first with a crushing score. The only downside is that the cafeteria could be more varied. According to Japan media Business Journal Japan, Nintendo's employee retention rate is as high as 98.8%, which means that for every 100 new hires hired by the company, only one chooses to leave.
Supercell CEOs recall that when they started the company, they were inspired by companies like Nintendo. These companies create entertainment products that are loved by hundreds of millions of people around the world, and they have been in operation for decades, more than 100 years since Nintendo.
Will 15-year-old Supercell be the next Nintendo?