Certainly to be filed under ‘A nice problem to have’, nevertheless it can’t be ignored that Supercell’s annual sales have been in decline for five years.
They peaked back in 2015 at $2.3 billion.
That stated, the developer remains one of the world’s most respected games companies, and also the most profitable in terms of earnings per employee.
Supercell only employs 340 people in four geographic locations and yet generated $1.5 billion in revenues and $463 million in terms of profits before tax in 2020.
But ‘number go down’ pressure must impact even Supercell.
After all, the company is owned by a consortium of Chinese companies led by Tencent; not a group known for their charitable attitude to under performing investments.
Which brings us to "Supercell’s surprise announcement of three new games, all of which sit in what is now called the Clash franchise and supported by the new Clash.com website.
However, unlike Clash of Clans and Clash Royale, Clash Quest (now in soft launch), Clash Mini and Clash Heroes are best seen as being brand expansions rather than new, innovative titles.
Of course, this is partially because the mobile game industry is now matured.
There are very few - if any - types of games or mashups that have not been made, probably dozens of times thanks to the explosion in hypercasual.
There are even AI-driven tools now available to help developers carry out this type of crazy ideation.
Everything was very different in 2011 when Supercell started work on Clash of Clans.
Everything was very different in 2011 when Supercell started work on Clash of Clans. There hadn’t yet been a great F2P mobile strategy game.
Similarly in 2015, prior to its release, real-time head-to-head mobile PVP games like Clash Royale didn’t exist.
In those - and other cases - Supercell was able to deploy its ruthless focus on excellence and UX by developing and operating games that set the bar for the entire mobile game sector.
Famously Supercell kills as many games as it launches, which is why the five games it has released have all generated over $1 billion in lifetime revenue.
No other company comes close to that run rate.
A new playbook?
In this context, the most significant question to ask is does Supercell have similar ambition for its new Clash games?
Having started to play Clash Quest, my preliminary answer would be no.
Although it’s only just entered soft launch - and even if they make it to launch, Supercell games undergo large scale changes in soft launch - it’s hard to see how Clash Quest can be monetised at such a level.
It’s beautifully crafted, of course, but even if PVP and Alliances are introduced, it doesn’t scream ‘high ARPU’.
Instead, it feels like a great game that people will play a lot, and which potentially allows Supercell to cross-promote them to other titles in the newly-expanded Clash universe.
Let’s not forget, Apple’s disruption of the UA ecosystem will impact Supercell as much as any other mobile advertiser, and creating large portfolios of content seems to be something many games companies are currently investing in.
Number go down pressure must impact even Supercell.
This line of thought also makes sense of Supercell’s surprise announcement itself.
While it was stressed these three games are ‘very early in development’ and might be canned, to me it seems more likely that unless the KPIs are terrible, these are games that will be massaged to launch because what matters isn’t their individual performance but how they together reinvigor Clash of Clans and Clash Royale.
For all their success, more gamers haven’t played those games than have, while there are hundreds of millions of dollars still potentially available from one-time players who have churned, and moved onto other games.
In other words, the mobile game playbook is changing and likely as not, Supercell is about to write it … again.