Now pulling in $1M a day, Supercell reflects on a banner year
Last week, we named Supercell “Most Surprising Success Story” of 2012. The 70-person social gaming startup from Finland astonished everyone by coming out of nowhere to become Accel Partner’s fastest-growing company ever, in terms of revenue. In November, when I visited Scandinavia, I learned that the company was bringing in $750,000 a day. As soon as I arrived in Helsinki, however, I heard that figure was actually closer to $1 million, a number seconded last by The Next Web.
Even a few months ago, the world had barely heard of Supercell. Before the summer, the two-year-old company had launched only two games, both of them failures, and it had killed another one in an early stage. But then a new “tablet first” strategy started to pay off. Supercell launched “Hay Day” and “Clash of Clans” and shot to the top of the top-grossing apps leaderboard in the App Store. On December 21, it hit a new high: Supercell’s two games are now bringing in more revenue than all of EA’s 969 games combined, according to App Annie.
Given the company’s extraordinary year, I checked in with co-founder and CEO Ilkka Paananen and asked him to reflect on the big lessons of 2012. Here's what he had to say.
Big money, small problemWhen Supercell disclosed to the New York Times in October that it was bringing in $500,000 a day, it did so purely as a recruiting tactic. It was just to prove that the company is a safe place to come and work, Paananen said. But since then, the company’s revenues seem to be the only thing people are interested in. “It’s weird for us, even internally, seeing all this speculation about how much money we’re making per day,” said Paananen.
So what did he learn from the experience? “I guess we’ve learned at least not to comment on any revenue figures,” he said with a wry laugh. “Probably a big misconception about us, really, is that our primary focus would somehow be monetization of the games. Nothing could be further away from truth.”
“Of course we pay attention also to monetization, but unless you have a game that is inherently fun to play, then you won’t have a game that’s engaging and you won’t have these players playing for months and months and months, or even years. And if you don’t have that, then it doesn’t really matter what the monetization per user is.”
The shifting importance of FacebookEven though Supercell has shifted its attention to the iPad and is no longer building games on top of Facebook’s Canvas platform, Paananen said the social network is still important because it enhances the user experience.
“The shift you saw in 2012, and I’m sure it’s going to continue to 2013, is instead of people viewing Facebook as just a marketing platform and [thinking] ‘Let’s try to force as many friend invites as possible,’ and that type of thing, I think at people will start to view it as, ‘Okay, what can Facebook do to enhance the user experience and add some real value to the user instead of just spamming their Facebook walls.’”
The number one lesson of 2012“It’s really the focus. You really learn to focus only by doing mistakes and failing. The key is to learn really, really quickly about those mistakes and then do course corrections. You find something that works, then you stick to it and have a long-term view.”
“In my experience, one of the most important things and also one of the hardest things to get right. It really means you have to be this guy who says no to all the time to all kinds of things. Focus is really not what you do, but what you don’t do.”
This year, Supercell killed three games, including its first effort, “Gunshine,” a beta release of “Battle Buddies,” which was available only in Canada, and an unannounced combat strategy game that was discontinued at an early stage. Supercell also decided to focus only on iOS so it could concentrate all its resources and energy on just two games and one platform.
Finding success from Finland“We’ve learned that it doesn’t really matter in which geographic location the games are created. The users couldn’t care less. If the games are great, they’ll play them. On the other hand, it’s truly a global business. We have people working here from 15 different countries and you really need to have this multicultural environment to be able to compete in this space.”
What 2012 provedThe future of the tablet and smartphone games has clearly shifted from quantity to quality, Paananen said. Developers should look for inspiration from the likes of Riot Games, War Gaming, and Blizzard, who all put incredible attention, passion, and polish into their games.
“The whole market is really going to shift more to that type of model, especially if you want to do these games with a higher engagement, which leads to higher monetization at some point,” Paananen said. “These companies who really have focused on a few number of products but have really made them great, and made them great for the users, I think we’re going to see more of that.”
Dealing with sudden success“It’s a weird feeling, especially at first when you get there. You see people talking about your company and so on. Even a couple of months back, almost nobody was really interested in us, and then all of a sudden people were really interested. At first it’s kind of humbling, but it’s also strange. Especially if you think about Finnish culture – we are a bit silent, definitely not extroverts, we’re more introverts, and maybe shy and so on – so it doesn’t really come off naturally for us, being in the spotlight.”
“We’ve talked here internally many times [about how] we shouldn’t pay too much attention to what people are saying about us, and what we really should focus on is let’s just build the best possible games and let’s make sure that our users are as happy as possible. If that’s the case, everything else will follow and it doesn’t really matter what people are writing about us. Quite frankly, we are slowly learning to pay less attention to what other people think about us.”
The lowest pointCancelling those three games. “You look at the team and you know how hard those guys have worked on the game, you feel sorry for them even though you know in the long term it’s the right thing to do and it’s best for the company.”
The best momentOn one day this year, three Finnish gaming companies ruled the App Store. Rovio’s “Angry Birds Star Wars” was the number one app in Paid, Fingersoft’s “Hill Climb Racing” was number one in Free, and “Clash of Clans” was number one in Top Grossing.
“That was such a great moment for the community over here,” said Paananen. “It felt incredibly good. I’ve been part of the Finnish gaming industry for such a long time and it just felt great for all of us.”
Given the current economic climate in Finland, it was especially satisfying, he said. “The economy as a whole for Finland isn’t doing that great, with the collapse of Nokia and all sorts of problems, but having that couple of days where Finland was the number one country globally speaking for mobile and tablet games was a huge deal for us. In these moments of economic misery, it’s great to be the one who brings in some positive news.”