Back in May Clash of Clans developer Supercell splashed out $55.8 millionto acquire a 62% stake in London studio Space Ape Games.
The UK developer has worked on titles such as Transformers: Earth Wars, Rival Kingdoms and Samurai Siege in the past, all to good success. And those titles continue to bring in the money for the company.
But during the last year, Space Ape has been changing the way it operates. It decided it was no longer going to be a strategy-focused studio, and adopted a model of smaller teams working on new titles that it hoped could be big hits in their genres.
It’s a structure akin to Supercell, which operates the world’s biggest mobile games with small teams of experts in their fields.
A new beginning
It was a bold move, thoughSpace Ape could afford to start taking more risks given the foundations its previously successful titles have provided.
The shift in how the company operates, and indeed the Supercell deal itself, may have come as a surprise to many. But it’s in fact been a long time coming.
“We had a series of discussions with Supercell in early 2016 with an all-day series of meetings between our game leads and theirs, and it just didn't quite work out,” Space Ape CEO John Earner tells PocketGamer.biz about early talks with the famous Finnish developer.
At that moment, realising it just wasn't meant to be really forced us to go and become a better company.John Earner
“We learned a lot about how they make games. We were very impressed with their culture and would have been keen to partner with them way back then, but we ourselves weren't really working on what we were supposed to be working on.
“We aspired to make massive hits and innovative games, but the reality was we were, I think like many game studios, caught up in paying the bills each quarter, making some terribly safe and fairly derivative products to do that.”
Earner says those discussions with Supercell left the studio with no choice but to change how it operates in a bid to work on those innovative new titles it craved to make and ultimately achieve that partnership it craved.
“I've always struggled to imagine ourselves anywhere else,” says Earner.
“And at that moment, realising it just wasn't meant to be really forced us to go and become a better company. We realised there are no easy ways out, we need to get more innovative, take bigger chances, make our teams smaller, give them more power and really try and learn from what we've witnessed in that space.”
Fast-forward to May 2017 and those changes, as well as the team’s previous successes, convinced Supercell now is the right time to partner up.
It continues a recent spate of investments by the Finnish developer, which has invested $2.9 million in AR studio Shipyard Games and snapped up a 51% stake in Badland developer Frogmind for $7.8 million.
The deal with Space Ape sees Supercell buy out all the previous investors in the studio, which included the likes of Sega Networks, and marks its biggest investment to date.
Supercell now owns 62% of Space Ape, while the rest of the company is owned by Space Ape employees and founders.
Despite its big stake in the London studio, Earner says the Clash Royale developer is taking a hands-off approach when it comes to games being developed and launched by the UK outfit.
We no longer have to worry about staying alive, we can now really focus on making great games for down the road.John Earner
“Supercell doesn't want a say in anything,” says Earner, a decision that may seems to echo Supercell’s owner Tencent, which has taken stakes in a plethora of developers around the world, but leaves the teams to make the key decisions.
What Supercell offers then, is perhaps something more useful and motivating.
“I think the biggest single way in which Supercell will help us - it sounds trite - but I believe it is by inspiring us,” states Earner.
“We've always believed we can be one of the next big game companies and that we can make a game in the next few years that defines the marketplace.
"But when you have a company as successful and as inspiring as Supercell looks at the entire marketplace, meets all the developers over the course of a year and a half and decides we're the ones that they believe can do it next, it's really emboldening. So more than anything else, they've given us the confidence.
“But really, I think what they give us beyond that is an investor and a partner who knows our business. Who knows how important patience is to our business and is willing to help us through the years that follow, through the pain of killing projects because they aren't quite good enough, making mistakes and failing and learning from them.
“They give us that runway to take our time and do it right, in a market where we and everyone else up until now are really focused on the quarter to quarter. Trying to get that game live in time to hit that Christmas window, to pay those bills and stay alive.
“We no longer have to worry about staying alive, we can now really focus on making great games for down the road.”
No longer having to worry simply about keeping the studio afloat month to month will have a direct effect on the studio’s expectations for new launches. Earner admits the hurdle for titles to reach a full release has certainly risen post-Supercell.
While it may previously have launched a game that has the potential to make tens of thousands of dollars a day, it’s now setting its sights far higher.
Space Ape can still launch the games it wants to, however, and it may not set that bar quite as high as Supercell’s top 10 or bust mantra. A particularly difficult proposition without the billions of dollars that Supercell can afford – the Finnish developer won’t be freely pumping money into the studio.
Earner says that instead, Space Ape wants to develop and release games that could define a genre and merely be a top 20 or top 30 grossing game. But ultimately, it’s the former ambition that matters more to Space Ape than simply grossing position.
“I don't think we would want to launch a game ever again that didn't have a very real shot of defining and owning a category on mobile,” states Earner.
We could have sold the company for more money to other partners, we had those opportunities.John Earner
While the goalposts for new titles have changed, Space Ape will continue supporting its existing portfolio as normal, continuing the regular events and strong live ops support the company is known for.
Its expertise in live operations is a point of pride for the studio, which Earner bullishly claims is what sets the developer apart from other mobile companies, in the West at least.
And it’s those existing games that will continue providing the foundation for the studio’s new titles.
“There's no cash infusion involved in the deal, it's not like they dropped $50 million into our war chest,” explains Earner.
“And I think that's a good thing. I think that can create some bad and complacent behaviour. One of our superpowers is live operations, we think that we are the best mobile gaming company at running live games. There are a lot of other good ones, but we've gotten extremely good at it.
“I think we would lose that superpower if we were to divest our live games like Rival Kingdoms or Transformers: Earth Wars, as those games give us a platform to get better and better at live ops, and serve as a training ground for new and seasoned employees alike.”
Ready for lift off
As Space Ape moves into a new future alongside Supercell, Earner is adamant that Space Ape’s independence is key to this new partnership. It’s unlikely to be branded Supercell UK, for example.
And it appears there’s no sense that the founders are looking to cash in. Earner says he intends to stick around for the long-term following the deal.
“Honestly, we could have sold the company for more money to other partners, we had those opportunities,” he admits, but explains that Supercell offers the opportunity for the team to create a better version of Space Ape and a long-lasting legacy in the industry.
“We're far from there and it's far from assured, but I think the dream would be for the people of Space Ape and for the brand that Space Ape represents to be something that is a going concern many years from now like Blizzard or Bullfrog. A thing that really lasts for a long time.”