Supercell made a profit of $810 million last year on revenue of just over $2 billion in 2017. These numbers are staggering, and yet shockingly, they are even lower than in 2016, when the company made $2.3 billion in revenue and over $1 billion in earnings. This is despite Supercell not releasing a new game globally in 2017, though Brawl Stars entered its Canadian beta in June and remains a limited release. According to Supercell CEO Ilkka Paananen:
Our headline numbers for the year are not as high as last year, as we did not release a new game globally. Our vision is to create games for as many people as possible that are played for years and remembered forever. That is obviously an insanely high bar to reach, and I’m proud that our teams don’t compromise on that and only release games that are the very best for our players. This is how we continue to build Supercell for the long term.
In case you’re wondering why games-as-a-service, and the mobile market in particular, are such important business targets in the gaming industry, this is why. Supercell has 241 employees, and didn’t even release a new game in 2017. It’s not unheard of for over a thousand employees to work on a single AAA console title, but on mobile, it’s possible for a small team to support an entire group of titles!
However, while it’s quite apparent that Supercell can wait around and keep updating their existing titles while continuing to make money hand over fist, they might have pressure from corporate parent Tencent and their investors to increase business in 2018. Their revenue did drop, and they are now the fifth-biggest publisher in the world instead of the second-biggest as they were in 2016 so they are under pressure to find a way to get those numbers back up, even if they are still wildly profitable.
What will this mean for Brawl Stars? Supercell will cancel good games in development or in soft launch. The issue is that while Brawl Stars is of exceptional quality in soft launch, and the game is a consistent top-50 grossing title, it might not reach the lofty heights of Clash Royale (Free) and Clash of Clans (Free). Instead, it might be more of a Hay Day or Boom Beach, games that other companies would kill to have in their portfolio which otherwise don’t reach the same lofty heights of the Clash titles.
Why would Supercell make such a big deal about trying to find a massive success somewhere in Brawl Stars? Well, consider that Clash of Clans and Clash Royale were estimated to generate over $1 billion each in 2017. While it’s possible these numbers are exaggerated or the numbers are off, consider that Apple and Google take a 30% cut of everything, and that due to Chinese business regulations, perhaps the money is getting passed around in odd ways. However, the point is that Clash is such huge business that Hay Day and Boom Beach might effectively be rounding errors in context.
However, does Brawl Stars have the market potential of a Clash game in it somewhere? Will Tencent give Supercell the time to figure that out? Or perhaps are the Supercell labs cooking up something delightfully devilish that will push the company back up to the top ranks? Considering the company’s massive success so far, and the fact that they could fall flat on their face and still probably make a couple billion dollars in 2018, nobody should weep if Supercell can’t figure it out.
