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[Gamesbriefers] What’s next for Supercell?
A valuation of $3 billion. Large, deep pocketed, Japanese parents. Only two games, but my, how successful they are.
What would you do next if you were the CEO of Supercell. And how do you make sure that the company doesn’t stay a two-hit wonder for ever?
I’d carry on doing exactly what they have reportedly done so far – making lots of small, creatively pure attempts to find another game that sticks. Then leverage the crap out of any success with the giant, billion dollar stick.
The element of luck is huge, the CEOs of both Supercell and GungHo are on record saying as such, and they are right. So I’d keep rolling the dice and waiting to get lucky. And then I’d bet big.
What he said: the strategy of constant experimentation in-house with new game ideas, killing the vast majority of them, and then finding one that’s worth slinging your weight behind in a big way.
I’m also interested in how they’re thinking about Clash of Clans, in terms of the next year, two years and beyond – when you have a game in this position, do you start thinking of it in almost TV-like terms (as in ‘this is going to be around for the next three years, what’s the arc of content?’).
I’m sure they are thinking about this, but would love to know how.
Riot Games have nearly a thousand people employed with their ‘one hit wonder’ F2P game.
The fact is, if you are running a service-based business like Supercell – then it’s fine to have only a few products. McDonalds are a notable ‘one hit wonder’.
So I would continue to plough resources into the two hit games as long as it makes sense. They seem to be doing this with the territorial and platform expansion we’ve seen recently. This should, IMO, be the company focus.
Re-investing in small titles would be the secondary focus, and we all know how Supercell work – this shouldn’t be a too costly or difficult to manage process.
Once you have a new title doing the right retention rates in soft launch, then the cross-promotion clout of the two hits will massively reduce the overall acquisition cost for new users – we’ve seen them do this with great success in partnership with GungHo in Japan before the investment.
The worst thing the company can do is get caught in their own success like rabbits in the headlights, or get distracted by the personal wealth generated and lose direction.
I would be looking to make the 3rd hit, obviously. I would move my key talent to this task and get them to focus only on getting game 3 launched – so create, iterate, destroy, create etc whilst keeping both HD and CoC evolving and engaging new and existing players, so I would hire talent in to work on those to keep them fresh and lovely.
I would also appoint a biz dev to handle all outsourced licensing opportunities that will be coming their way, or indeed stoke those conversations.
Sadly, I would keep it simple and hope to have a fair share of luck!
Sorry to answer with a question, and a derailing one at that, but one thing I haven’t seen written about is whether all this incoming money has gone into the company’s coffers or has a load been taken out by founders/shareholders? I think this actually has a substantial bearing on what the CEO should do.
I can think of very few gaming acquisitions where the founder of the acquired company hasn’t looked to exit the business as soon as practically possible, once they realise that a) they’ve got enough money to do what the hell they want forever and b) they’re not overly keen on suddenly having a boss (or a market) pushing them in directions they don’t necessarily want to be pushed.
If the founders are now super-rich personally, but are unlikely to be the people at the very top of a new Gung Ho/ Supercell supergroup, they should decide whether this is something they really want to be doing. If not, they should start looking for or nurturing those people who will step into their shoes in a year or two when it’s time to move on.
Putting the above aside, the company can choose between two different paths to my mind. The first is a ‘more of the same’ approach – the argument being that they’ve done it twice, and clearly it’s working. As previous posters have suggested, make small, quick, low risk things and throw out all but the winners. It’s a great strategy, but still one that depends on a lot of luck. One of the few things I’ve learned in the depressingly long time I have been in games is that, whenever a company thinks it has cracked the secret formula for success, it inevitably goes bust trying to replicate it.
If, on the other hand, despite their obvious talents, it turns out that having a big hit really is hard to replicate, with millions of apps out there, statistically someone ends up having a couple in a row, a ‘more of the same’ approach is not so good. The same argument is often made about fund managers. In that instance, the right approach would be to push heavily to turn those great iOS gaming brands into huge franchises outside of games.
It looks like they have enough cash to do both. The biggest challenge is probably going to be to keep the markets happy. Markets want growth, and growth from a position based around incredible outliers is going to be very hard to predict.
Supercell now has the people and money to do where no one dares to go before. They can play risky, daring. Money plays no role anymore. They had that before but maybe not at the scale like now.
Actually because they have the budgets now they should do go risky as this is a unique chance. No limits. They shouldplay on this. They could be the EA of this century.
Go Ilkka go!
I think you have it spot on here Teut… But even if the corporate culture of the new organisation doesn’t work out for them (EA/Playfish for example) they will do something spectacular on their own terms as soon as they can.
In the meantime I’d be amazed if they don’t also do crazy amazing things outside games too like Stuart has said. I think most of us
remember Illka/Kristian from the early days; brilliant people who have achieved spectacularly already and who remain creatively passionate.
I’m sure these are the guys who will make the next bigger than GTAV thing happen; either themselves or through their support/influence…
I can’t wait to see what’s next!
Thanks guys – this thread is a really fun read.
Just to be clear: Ilkka, Mikko and gang built Supercell. I was incredibly fortunate to be able to help them early on by helping them raise their seed round and later on to be able to make some introductions and offer an opinion here and there, but I really had very little to do with their success. All that is purely down to Ilkka’s vision and leadership and the phenomenal talent at all levels in that team. I’m super flattered by the “Ilkka and Kristian” mention but it really needs to be “Ilkka and Mikko”. 🙂 And for what it’s worth I think they have an incredible few years ahead of them in the new configuration. Will be a lot of fun to watch!