Supercell is willing to die on the hill of innovation

As Supercell celebrates another near-record year following on from 2024’s highs and live games success with Brawl Stars and Clash Royale, the company is looking ahead to the future.

It’s been over seven years since the developer had a major hit. Squad Busters was cancelled, Mo.co is getting a revamp. Hopes are currently on that, Shanghai studio’s Project R.I.S.E. and adventure title Boat Game, among other projects no doubt rumbling away behind the scenes.

In his latest blog post, CEO Ilkka Paananen says the market is largely fat with just 3% growth per year on average over the last five years, per Newzoo data. “That's not an industry thriving. It's an industry coasting,” he says.

He calls launching a new hit game as hard as ever and uses the blog post to show Supercell is making big investments in building new games while marketing itself as a home for entrepreneurs.

Paananen sees the industry - and perhaps Supercell itself - at a crossroads.

“Are we satisfied with the status quo – relying on optimisation and incremental improvements to the great games we've already made?" he asks.

“Or are we brave enough to dream bigger and be more ambitious about what this industry could become? And if we are more ambitious, what do we need to do to kick the industry into new growth? I believe the answer is innovation.”

The claims

Paananen has set out the challenge:

• Of 53,000 games launched since 2020, 22 (0.4%) have grossed more than $1 billion.
• 20 of these titles came from developers in China, Japan and South Korea.
• Two, Dream Games’ Royal Match and Scopely’s Monopoly Go, were developed in the ‘West’.
• Chinese developers have a “natural advantage” in the “world’s biggest market”.
• Western developers “have not brought radical new gameplay innovation to the market” in the vein of Clash Royale, Pokémon Go and Brawl Stars.

Paananen says rather than innovating, the industry has gotten very good at optimising what exists. “A/B testing. Incremental improvements. Squeezing more out of proven formulas,” he says.

“The work of improving live games is not the problem,” he states, adding: “But here's the reality: live game excellence alone doesn't grow an industry. It maintains one. For the market to truly expand, we need to bring new players in. People who don't currently play mobile games. And that requires innovation. New genres. New ways to play.

“I've seen what happens when an industry stops innovating. Remember the era of those downloadable PC/Mac games with 60-minute free trials back in 2005? Eventually, the market consolidated around just three genres: match-3, hidden object, and time management games. Endless optimisation, minimal innovation.

"What could have been a massive market became a limited one. Obviously, we do not want mobile games to end up in the same place.”

Supercell’s history

Supercell made its name with hits like Clash of Clans and Hay Day and being an early mover in the mobile free-to-play games market. Clash of Clans builds upon titles like Kixeye’s Backyard Monsters in the build and battle genre, while Hay Day latched onto the browser success of Zynga’s FarmVille.

Supercell has later developed what it might term more innovative titles with Clash Royale and Brawl Stars.

In recent years, the company has doubled down on building something new, seemingly leaving behind attempts like Hay Day Pop to lean into existing categories.

“That’s obviously the temptation in the games industry, right? You look at what’s successful today, you look at the top 10, and then you’re trying to build a better version,” Paananen told PocketGamer.biz during a media call.

“We are just firm believers that you have to do exactly the opposite, especially if you want to bring new players to the market.”

But while rivals - through 22 new games since 2020 - have found billion-dollar hits, Supercell’s ambitions have stalled for the past seven years.

Supercell’s new structure

Supercell has spent the last few years restructuring itself to help find that new hit. As we covered here, actions include:

• Splitting the company into two divisions: new games and live games.
• Hiring Drussila Hollanda as head of new games last year to spearhead this push.
• The Spark program designed to greenlight teams - bring together individuals or supporting existing teams.
• AI Innovation Labs in Helsinki, San Francisco and Tokyo to explore how AI can be used in games.
• Investments in external studios across platforms and genres. Check out our interview on that here.

On top of this, Supercell is now introducing real budget based constraints to force its new games teams to be more creative and create urgency in their work. “Too many resources lead to unfocused exploration, not creative breakthroughs. Constraints force prioritisation,” says Paananen.

Taking a leaf out of China’s book, as well as a bid to attract founders, Supercell is offering to share game profits from successful new launches. We previously spoke with AFK Arena studio Lilith Games, which offers a similar scheme to employees.

We asked whether Supercell is taking lessons from successful companies in countries like Türkiye, Israel and China. Paananen says it's taking lessons from startups from all over the world.

“Basically what we’re trying to do is we’re trying to replicate what makes startups work. If you think about innovation as a whole, what type of companies mostly bring these new breakthroughs and innovations to the market, that innovation mostly comes from startups.

“What we’ve tried to really figure out, as Drussila said, is what are the core pillars that make startups work? And we believe that it’s an amazing team of founders, it’s those constraints and it’s the incentives.”

Rival success

As Supercell struggles to find its next hit, other companies have succeeded - even as the industry has faced a particularly challenging period.

Scopely’s Monopoly Go, Dream Games’ Royal Match, DeNA’s Pokémon Trading Card Game Pocket, Century Games’ Whiteout Survival and Kingshot, FirstFun’s Last War, Paper Games’ Love and Deepspace and Microfun’s Gossip Harbor have all been highly successful.

Arguably, most of these titles have built and iterated on what’s been successful in the market before.

In the case of titles like Whiteout Survival and Last War, by building on the 4X strategy space, they have substantially grown the category’s already lucrative revenue potential. Microfun has done the same in the merge genre - outgrowing previous incumbent Merge Mansion from Metacore. Dream Games’ Royal Match, a highly polished match-3, has surpassed Candy Crush Saga’s biggest highs.

In cases such as Microfun, Century and Dream, these companies have built systems that they can then replicate into other titles such as Seaside Escape, Kingshot and Royal Kingdom. Supercell’s approach is instead to take learnings from success and then start from scratch.

We ask why Supercell hasn’t been able to launch a successful new game while rivals have, given that the company is highly profitable, backed by Tencent, has a studio in Shanghai and has access to China’s highly lucrative market.

“I think the simple answer is that we just haven’t been able to produce great enough games. It’s very competitive out there,” Paananen tells PocketGamer.biz.

“We’d love to be at the top but we aren’t, that’s the truth,” he continued, adding simply that the company has to do "better work" and "build better games".

A bet on innovation

Supercell has firmly set its sights on innovation for the years ahead. The company appears no closer to finding its big hit, though it does have some games in testing right now.

Where rivals have succeeded both in innovating and building on top of what has come before, Paananen has charted the company on a very specific course.

Referring to the Supercell's hundreds of millions of players and its hundreds of staff, Paananen is unrelenting in his belief: “We owe it to all of them to make the most of this opportunity. Not to play it safe. Not to optimise our way to slow decline. But to take the kinds of risks that could create something truly new for players. The kinds of games that don't exist yet but should. That's what we intend to do.”

At Pocket Gamer Connects London, we asked Arcadia Gaming Partners founder Akin Babayigit the question of whether innovation or iteration on existing ideas is more interesting right now.

“I think I’m increasingly more excited about innovation now, because I think that a few exciting investments that I have in the portfolio are actually game mechanics that maybe haven’t been tried before,” he said, highlighting titles like Loom Games’ Pixel Flow. The title is said to have scaled to seven-figures in daily revenue just three months after launch.

“At the same time, the market is so competitive on the iteration side of things, that you have to have an insane team to start.”