Supercell profits drop 20% on back of ageing portfolio

Profits fell at Supercell by 20.5 per cent year on year. This was mainly attributed to falling revenues from its initial hit game Clash of Clans, which is now five years old. Supercell also didn’t release any new titles in 2017 – apart from soft-launching its Brawl Stars game in limited regions.

“Our games are one year older, and in the West, they are not growing at the pace they used to… We also did not release new games last year,” CEO Ilkka Paananen commented.

The company has long stuck to a strategy of only releasing games it thought would be Top 10 hits and killing off any titles that fail to achieve that. That means it only has a current roster of four games: Clash of Clans and Hay Day (2012), Boom Beach (2014) and Clash Royale (2016).

Based on that Supercell has only produced one huge hit every two years – and it should be noted that based on chart data Clash of Clans appears to have hugely outperformed its other efforts. With such a focused release strategy, though, it was likely that the company would see some less profitable years.

“In the short term, it would be tempting to put a game out fast to fix the numbers, and to keep the growth going. But none of our development teams wants to be the one to release our fifth best game,” Paananen acknowledged.

All that said the company still made a huge €729m in 2017 down from €917m in 2016. It’s far too soon to call this a trend, of course, but despite Paananen words, the pressure is now on the company to find that next big hit.

Supercell has been owned by Tencent since mid-2016 and was bought for $8.6bn.