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Crucible Moments
Supercell ft Ilkka Paananen - How an Early Pivot Led to ‘Clash of Clans’ and ‘Brawl Stars’
00:43:02
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- [00:01]
A
Many of the best things we've learned have actually come through those failures. Which has led to me think that are these failures even failures in the first place? I mean, should we even call them failures? Maybe we should just call them like experiments. And sometimes experiments are, you know, or you have a hypothesis and sometimes the hypothesis proves to be true, sometimes it proves to be false. But in either case you learn something new. And maybe that's how we should think about new games as well.
- [00:36]
B
Welcome to Crucible Moments, a podcast about the decisions and inflection points that define some of the most consequential companies of our time. I'm your host and the managing partner of Sequoia Capital, Roloff Botha. I used to think of games as belonging to one of two categories. On the one hand, you have games that require weeks of your life to gain basic proficiency and then pull you into a vortex for a year or more where you can spend hours playing each week. On the other hand, you have games that are casual, lightweight, with simple game mechanics, brain teasers, puzzles, the kind of game you return to casually while waiting in line. Supercell, the Finnish game studio behind massive titles such as Clash of Clans, Hay Day and Brawl Stars, managed to create a third category of games. These are mobile experiences built with easy on ramps but incredible depth and innovative strategic and social features that keep players engaged for years. In its 15 year history, Supercell has only released a handful of titles yet yet nearly all of them have become chart topping hits with remarkable staying power. Time and again, the company has defied the churn of the mobile games industry by obsessing over detail, killing more projects than it ships and empowering small teams to think like independent studios. Today we'll explore supercell's early pivot to focus exclusively on mobile gaming. How the company rapidly broke into markets where other gaming giants failed, how and how it took a hard look inward to reignite growth when momentum began to stall. The result? Billions in revenue, millions of daily players, and a reputation as the rare mobile developer whose name inspires the same reverence as a console giant. This is the story of how supercell quietly rewrote the rules of mobile gaming.
- [02:46]
A
My name is Ilka Pannen and I'm one of the co founders and the CEO of supercell. I studied industrial engineering here in Helsinki in the University of Technology. It was sort of a kind of business track of a technical university. Then most of my classmates, they basically either went to investment banking or management consulting and I was one of the odd ones out who was actually got interested about entrepreneurship. And I just wanted to basically found my own company or be part of a startup, which was relatively like not that common thing to do in Finland at that time. I got super lucky. I bumped into these guys who wanted to found their company and it happened to be a games company I joined and all of these guys were game developers, so all they wanted to do was develop games and then they needed somebody to do everything else, like including, you know, all the boring stuff like sales and admin and finance and that type of stuff. And they couldn't really afford to pay anybody any salaries and I was probably the only applicant. So they got me and you know, there I was, I think was 22 years of age and obviously had never really had a real job, had no idea what I was doing. I'd only read about business in from books in the university. These guys like they're trying to figure out what should they call me. And then they thought that, well, if you are going to be selling our games, you need a title with credibility. But they couldn't come up with anything else, so they started to call me the CEO.
- [04:17]
B
While Ilke's establishment as CEO of Sumaya was somewhat haphazard, he excelled in the role, growing the company to nearly 60 employees before it sold to Digital Chocolate, founded by EA's Tripp Hawkins. The first time I met Ilke in person was actually at a Sequoia event. I'd been wanting to meet Ilkern for a very long time and, and we went for a lovely walk around the gardens of this hotel where we were staying in Scotland. Digital Chocolate was doing well as a business and Ilke had obviously made a big impression on this company with what he did for them in Europe. But as the company evolved, Ilke began to feel that some of the business's processes, even the ones that he put in place, were flawed.
- [05:01]
A
I essentially created this organization that was relatively process driven and somewhat hierarchical as well, as were all the other games companies at that time as well. Over time I started to realize that actually like these processes and all these well thought out systems don't really matter unless you have the best people, the best creative people. And oftentimes what tends to happen, especially at the successful games companies, that sometimes these game developers who actually build the games, they sort of lose control and if the control moves somewhere outside the developers and the game teams and to the upper management and so forth, that actually doesn't really make sense because ultimately actually it is the game developers who know what's best for their game and what's best for the players. And then this idea kind of start to grow on me and my fellow co founders that what if you would found a completely new type of games company and you would almost like flip the organizational chart upside down, Meaning that instead of like the upper management and the leadership, like owning the vision, what type of games the company produces, what if that vision would be owned by the individual game teams?
- [06:17]
C
It's exactly the opposite of the traditional hierarchy structure. The idea here is that we actually give the power to the people who are closest to the product, who are closest to the game to drive those decisions. My name is Maya Hoffery. I am the general manager of hayday@supercell. I think what we like to look at it is just like a record label. Like in the record label, the managers are not gonna tell the artist what to play and what to do. So why should it be different in the gaming industry? So how do we make sure that the people who are actually working on the game are the one who have this full creative decision making?
- [06:51]
A
We start to think these individual game teams as very kind of their own, almost as their own companies, their own little startups within the greater company. And we start to call these startups or these teams sales. And then we asked ourselves like, okay, what should then we call the entire company? And then that led us to the name supercell. But the whole idea was that let's give the power to the game developers and let's make them the superstars of the company. When we founded supercell, the vision was that we wanted to create games that would be played by as many people as possible. So we wanted to design games for the widest possible audience, but then also create games that have this longevity. Games that people would actually play for months and months, and if not for years and years, it was a very radical idea because the whole market was fil these games that would shoot up the charts one day and a few weeks later nobody would be playing that game anymore. And we wanted to change that. Following that sort of thinking, we were asking ourselves, what is the games platform that has the widest possible reach? And Remember now it's 2010 and at that time it actually was Facebook.
- [08:04]
B
Supercell's initial ambition was to create browser based games that could be played across PCs and eventually on mobile devices, then a burgeoning market. In 2011, the company released its first title, a Facebook connected game for browsers called Gunshine Off. The strength of Gunshine's initial Metrics and the promise of its ability to scale across platforms. Supercell raised its Series A. But soon after this initial investment, the team began to see that Gunshine wasn't catching on the way they had hoped.
- [08:36]
D
While social network based gaming had been on the up and up for a while, by 2010, 2011, that market had been saturated and in many ways also Facebook at the time had institutionalized these new rules and policies around monetization that just made it much more difficult for companies to do well. My name is Joost van Bruner, I am the CEO of Eldora and I teach on the business of video games at New York University Stern School of Business. Supercells title that they launched on Facebook, a game called Gunshine. It didn't really go very well. As Facebook kind of came up and realized that a lot of game developers were just spamming people on their timelines and so on, they started to close that down a little bit and it just made it a harder platform to do well. So in other words, the growth spurt that a platform like that would have started to ebb away.
- [09:31]
A
Once we start to scale the game, we realized that actually the metrics do not scale and this game actually isn't working out. This game won't be one that lots of people would play for years. And then just a few months after we had literally raised the Series A at this, partly on this promise of this successful game, we decided to kill the game, Kill Gunshine. I grew up playing Nintendo games and Nintendo as a company and their games have always been big inspiration for me. And if you can set the bar that high, you know, it was very clear that they were nowhere near reaching that type of quality and that type of company. I shouldn't call it an easy decision, it's anything but easy. But I guess it was the ambition and we believed in our vision so much that we just didn't see any other way.
- [10:27]
B
Just months after the first game's big public release, supercell scrapped the project and return to the drawing board where they face the crucible decision. Was a cross platform strategy the best path forward? Or should they pivot the company and narrow their focus on an emerging new technology?
- [10:54]
A
They noticed the rise of tablets and mobile. And as we were sort of exploring that platform, we sort of figured out that actually from our point of view, there actually aren't that many great games built for this platform that would actually truly take advantage of what the platform is all about, which is that first of all, the user interface is very, very different. It's Dutch ui and most games were, at that point they almost felt like ports from our platforms to this touch UI platform. So we wanted to create something that is true and native to the platform. And the other big thing that the totally believed in was that they wanted to create games that were like truly social, so that the social feature isn't just, you know, inviting your friends and spamming them and trying to get that viral spread going on, but the social play would be actually you truly play with other people.
- [11:47]
D
The big risk for supercell by going all in on mobile was sort of an obvious one in that you just raised the series A totaling $12 million and you have this cross platform thesis and oh, by the way, we're going to scrap all of that, we're going to kill our mmo, we're going to take Gunshine off the market and we're going to go this entirely other direction. Like it takes a lot of stones to do something like that, right?
- [12:15]
B
Keep in mind the App Store was barely three years old and early smartphones weren't capable of the sophisticated graphics they are today. By exiting cross platform gaming, supercell risked alienating players who still preferred browser based games or didn't have a smartphone. But the team saw where the world was heading. Touch screens weren't just a novelty, they were becoming the primary way people interact with games. Supercell decided to make the risky bet, going all in on mobile.
- [12:47]
A
Obviously it wasn't the most pleasant call to make. I remember back in the day telling somebody who invested 8 million euros, obviously believing in the first game and telling that, okay, two pieces of news. First of all, this game isn't working out. And by the way, the platform strategy that they all believed in isn't working out either. And we're going to throw everything that we've built so far down the toilet and we're going to focus on tablets and mobile. We've always thought that the biggest risk is not to take risks and yes, we probably could have built an average, reasonably sized business. Even with the existing strategy focusing on Facebook games and slowly iterating and making them better and doing incremental improvements. But it wasn't anywhere near close to our ambition.
- [13:45]
B
Once the decision was made to focus entirely on games for mobile devices, ILCA and the company's cells of developers dove into designing gaming experiences that stood out from everything else on the market. Games that were easy to learn had bold visual design and imaginative social aspects that rewarded collective play. In the process, supercell also forged an ethos that would become a cornerstone of company culture.
- [14:14]
A
We are like at least somewhat famous for celebrating failures. Like many of the best things and many of the best things we've learned have actually come through those failures. Which has led to me think that are these failures even failures in the first place? I mean, should we even call them failures? Maybe we should just call them like experiments. And sometimes experiments are, you know, or you have a hypothesis and sometimes a hypothesis proves to be true, sometimes it proves to be false, but in either case you learn something new and maybe that's how we should think about new games as well.
- [14:53]
B
Ilke adopted the philosophy of Failing early and Failing Smart.
- [14:58]
C
The philosophy of Fail early, Fail Smart is actually true in practice, in the day to day. If we break that down into two parts, there is the first part, which means that fail early. So let's do it quick. Let's try to understand before we spend too much time and too much effort and budget on something that doesn't resonate with players. So let's make that we get to players as fast as possible and then Fail Smart. It's not smart if we didn't learn from it. So we don't hide our failures. Quite the opposite. We celebrate it.
- [15:31]
D
Supercell is pretty strict when it comes to metrics. They look for specific numbers, certain thresholds to be met and they are rigorous in that. So they look at a variety of different numbers every morning they send around a company wide email with all of the metrics for all their titles to show everybody. They love that transparency. If something doesn't meet a threshold, it gets shut down. And so criteria are the growth of the audience, is it working regionally in a way that we expect it to. They go and do soft launches and so they have this very rigorous analytics based approach of once we build it, then we test it against the market and we look for certain numbers in that effort and only when they reach those thresholds do they get the next round, the next budget, the next phase or milestone in the process.
- [16:26]
B
Fail early and Fail Smart came into practice with a soft launch of Pets vs Orcs, Supercell's first mobile title, which you probably don't remember. When retention fell short, Ilke and his team didn't wait a year and a half to accept defeat. The project was swiftly shut down and the company got back to work, but not before establishing what would become a supercell tradition.
- [16:51]
A
When we killed our first game, this game called Pets vs Orcs, it was a mobile game and I still remember fondly, I was Sitting at the lunch, you know, together with the lead of that game team, who was telling me that, hey, in the afternoon, I'm going to just get the whole company together, and I'm just going to share what we learned through this failure. And I was thinking to myself, well, it's probably going to be a bit sad, so what could I do to kind of cheer it up a little bit? And then I just had this idea that I'll just get a few bottles of champagne and I'll just give them to the team and we can all have them together, and maybe that'll make it a bit more fun. And then I did exactly that, and people thought it was sort of funny. And then next time when they killed the game, did the same thing. And then this thing started to live its sort of own life. And that tradition is still very much alive.
- [17:40]
B
Many companies have talked about wanting to have innovative cultures, and I've heard many companies talk about the need to celebrate failure. I think the reality is that very few do, because it's hard. It's very hard for people to accept that. And I think part of what supercell has done well is they've sort of leaned into that very aggressively and deliberately where they make a show of this celebration so that it's not just paying lip service to this idea. And I think that's part of why the culture has been so incredibly innovative. In the summer of 2012, Supercell's commitment to learning from failure paid off. The company soft launched its new game, Hayday, a farming simulator where players grow crops, raise animals, and trade goods.
- [18:28]
A
I still remember when we launched Hayday, and then the first metrics started to come in, and they were just incredibly good. Like, we had never ever seen anything like that before. And they were actually so good that for the first, maybe few days before that, there's something wrong with our analytics systems, because all we had seen until that point were, like, metrics that were far worse. Then they sort of, like, verified the analytics system and, you know, okay, there's nothing wrong with it. These figures seem to be real. The metrics, they held up. And that was an incredible feeling. Then we, like, slowly we start to realize that, hey, we've. Heyday, we've actually, like, now we've found something. And then the exact same thing happened on Clash of Clans just a few months later.
- [19:14]
B
Clash of Clans, Supercell's second global release for mobile in August 2012. And my favorite game exploded in popularity out of the gate.
- [19:25]
A
It was a pretty incredible few months I remember we were celebrating. We got to the 10,000 daily active users, and we bought some kind of cake, and everybody at the office had it. And then maybe just a few days, even later, a week later, we got to like 50,000 daily active users, and then they again get a cake, and then they go to 100,000, and then, you know, they're just couldn't believe it anymore. Okay, we get a cake, then we go to half a million daily active users, another cake, million daily active users, and then this. Okay, 10 million, 30 million, 50 million, 70 million, 100 million. That's a lot of cake. Sometimes I still need to have to pinch myself to say that it wasn't a dream or it actually did happen. So the decision to kill Gunshine and pivot from Facebook to mobile, why that was a pivotal moment for supercell, you know, well, quite simply, without that decision, like, supercell wouldn't be, you know, the supercell that we know today. And of course, we got extremely lucky with the timing. It was a perfect time to do exactly that.
- [20:34]
B
By 2013, hay day and Clash of Clans were raking in an astonishing $2.4 million in daily revenue. Riding the success of these titles, Supercell set its sights on global expansion, particularly in East Asia, a potentially massive market for mobile gaming. But with heavy regulation, language barriers, and fierce local competition, the region had earned a reputation as the great graveyard for Western gaming companies.
- [21:07]
A
One of our biggest dreams was, and still is, to build the world first truly global games company. You know, a company that actually not only does well in the west, but also does well in the East. And, you know, it's just these true global hits, which is something that, you know, hasn't really been done before.
- [21:25]
B
The Asian gaming market actually pioneered much of what we've seen evolve in the United States and Europe over the last 15 or so years. And so, in some sense, the Asian market was really leading the world in innovating in around gaming and specifically then around mobile gaming. If you think about the demographics of the Asian market, you also have many young people who, even if they were living at home, probably didn't have the sort of space in their houses that, you know, an American family might have enjoyed and that the mobile phone was even more the primary device that people used. And so I think the Asian market had tremendous learnings that Western companies could benefit from as they tried to improve their own businesses.
- [22:16]
A
Maybe the biggest obstacle was a mental one that we knew very well that most, if not all, of the Western games companies haven't really done well here. And you know, and this story, it kept repeating itself. So a western game company arrives, enters a market, high ambitions, a lot of excitement and then leaves like two or three years later because nothing worked out. We tried to learn from this. So we talked to quite a few people who had had the same experience. We tried to be very open minded and they actually spent quite a bit of time talking to the local game development scene and trying to understand what the market is about and that was a really humbling experience and they started to realize how incredibly difficult it will be. But at the same time the market opportunity was so big that they thought that we should try. We decided to enter market, the Japanese market. We opened up an office, hired local talent and off the event.
- [23:13]
B
With the explosive growth of Hay Day and clash of clans, Supercell caught the eye of SoftBank, the Japanese conglomerate with a reputation for bold tech investments.
- [23:33]
A
I actually met Vivitaisohn who was the brother of masason, founder of SoftBank and Taizo obviously had built this incredible games company with Gung Ho and we got along really well and, and then a few weeks later I think he asked me whether I would like to meet his brother Masa. And then of course I, I wanted to meet with him and obviously a huge legend and one of the best entrepreneurs of, of all time. So I, I met with Masa and, and he was, you know, he was interested like in investing to us or even buying the company. And then I basically just told Masa that, you know, we have absolutely no intention just to sell the company. There's still so much opportunity left and you know, we will just keep on doing what we are doing.
- [24:18]
B
Ilke had the ambition and passion to keep building and he was protective of supercell's unique creative culture. He felt it was too early and too risky to give up control at such a pivotal stage in the company's growth. At the same time, he knew that a major investment would offer supercell the critical resources and market insight to break into East Asia. But when he told Masa san he wasn't willing to sell the company, Masa's response took him by surprise.
- [24:48]
A
And then he said that, well that's perfect because I just want to partner with you guys and I'll give your VCs some liquidity and let me buy like 51% and even if I own the majority, you know, I'll give all the control back to you guys, the founders, because I don't really know much about games. I trust you guys and all I want is that 51% economic interest in the company. Obviously it was a great outcome for the investors, but it also a great outcome for us as founders because we actually became even more independent after that deal, which might be counterintuitive.
- [25:24]
B
In October 2013, SoftBank acquired 51% of Supercell for $1.53 billion, a decision that would pave the way for expansion into East Asia.
- [25:36]
D
One of the things I admire in these contexts is supercell's ability to not just have the press release say that they're going to stay mostly independent and they're going to be their own company after you get a big check from a firm like SoftBank, but they actually did. And the reason you find out then, of course, is because they wrote it into the deal. They were able to keep their headquarters in Finland. Decisions stayed with the team, with the cells of supercell's organization, and there was no real expectation of going public.
- [26:10]
B
Despite owning 51% of the company, SoftBank enabled Supercell to maintain incredible independence. I think that's rare. I can't think of any other examples where that has happened. And this was three years after the company was founded, which was an incredible achievement, I can tell you. The rest of us were very disappointed when they got the SoftBank acquisition. My heart sank because it meant that Supercell would never be an investment opportunity for Sequoia anymore. And that made me very sad. Fueled by the new investment, supercell accelerated its expansion into the Asian market. Partnership with Japanese game studio Gungho, also majority owned by SoftBank at the time, proved pivotal in helping the company crack the region. In 2016, Supercell's success drew the attention of Chinese tech giant Tencent. Tencent led a consortium to acquire an 84% stake in Supercell, valuing the company at $10.2 billion, making it Europe's first decacorn again.
- [27:15]
D
Supercell managed to keep the SoftBank style independence. Tencent, I imagine, relented on a lot of this because supercell was such a juggernaut at the time. It was so successful for a company like Tencent and unique opportunity to buy its way into a global audience. Tencent was clearly looking beyond its own boundaries.
- [27:36]
A
I think SoftBank and Maze is that they have this very long term vision in a very similar way that Tencent has a very long term vision and they are both like extremely patient as sort of shareholders and partners. So it sort of gave us the time, what we needed because I mean, it just takes Time to build great things. And it definitely takes time to build great games for like really tough markets like say Japan or China. So you have to have patience and you need to have partners who have that patience. So we got that from SoftBank and it has obviously continued with Tencent. It's highly unlikely that you're going to have an overnight success in a market like say Japan or China. You have to be patient and you have to learn something new every day and just keep on getting better and better.
- [28:28]
B
In 2018, Supercell released yet another hit game, Brawl Stars. But by 2020, its revenue began to wane. And while classics like Clash of Clans and hay Day continued to generate revenue, no new titles were released. The company's sales dipped and by 2023, Supercell had slipped out of the top 10 mobile game publishers for the first time in a decade.
- [28:55]
D
So after 2018, Supercell seems to be almost go offline in terms of new releases. Right. So we get four multi billion dollar releases and then all of a sudden nothing. Right. What happened?
- [29:11]
A
I think about the time after the sort of Brawl Stars release, there was like a few years where we're a little bit sort of stagnant, I would say, as a company. Well, first of all, like our live games weren't growing. We were basically flatlining. And the biggest reason behind that was that we just quite simply weren't doing enough for our players. Our teams were just like frankly too small and they were just trying to do too much with too little. In today's world, I would say it's never been this hard to launch successful new games. Obviously the competition is tough. There's like so many great games out there and there's a lot of choice for the consumers. And the competition doesn't only come from games. There's like other forms of media, like social media, TikTok, these type of things and they all like, they're all competing for people's free time and it's tougher than ever.
- [30:09]
D
By 2018, the mobile games market is saturated. Everybody's out there, everybody's making games, the quality games improves. There's quite a bit of money sloshing around, both as investment money, you know, as gaming is now this investable property. The math started becoming much more strained for a lot of companies. I think at Brawl Stars that was a success that they had. And after that the economics of mobile gaming just made the metrics almost impossible to get off the ground. Even if you were a supercell.
- [30:48]
B
Supercell had reached another crucible Moment it needed to figure out how to release new games that could break through in what was now a crowded market while also breathing new life into its old titles.
- [31:01]
A
It became very clear to me that we have to change things. I mean if and when we want to build this company that would last forever, if we want to be anywhere close to somebody like Nintendo, we have to change.
- [31:17]
B
Reinvigoration is hard. It requires you to address the culture of organization. It requires you to set new goals, new targets. It requires inspirational leadership and a vision and it requires effort. And that's especially hard when you've been successful because human tendency is to, is to relax and to enjoy the fruits of the incredible results that you've had. And so it requires a certain kind of obsession and maybe an unhealthy drive to keep pushing and pushing at a company off site. In August of 2023, Ilger decided to confront the problem head on.
- [32:02]
A
I opened my presentation with a super painful animated slide where I had super sales like top grossing ranking among the global publishers starting from 2012 and I think they were number one. And then I think around maybe 2019 or 20 they started to drop and then it got to a point where we even dropped out of top 10. And year by year I made all of us watch it and I told everybody this is going to be very painful but I just want to open up everybody's eyes and I want to get us to the same page where we are in the same presentation. I talked about my own failures and true to supercell culture, had a very big bottle of champagnes because the failures were so big. And obviously ultimately all of this was my fault because ultimately it is the founder and the CEO who was responsible for the culture.
- [32:56]
C
I actually, I joined a little bit before that off site. So a week before we were talking about this change and then kind of like really owning what it means. And I think that was super inspiring for me to sit there and hear the CEO talk about a take responsibility but also kind of calling out what he thought were mistakes and how we learned from them. It was clear that change was in the air and I think that was super interesting.
- [33:24]
B
To encourage innovation in new games and and to iterate on successful existing games, Ilke proposed reorienting the company around a two pronged strategy.
- [33:34]
A
Our mistake was that we applied exactly the same thinking to both of these very different problems. So then we sort of came up with this thinking that okay, let's start to again think about these new game teams as their own startups and they Just apply everything that we've learned and I've learned about the startup world to these new games. And then they actually start to take a lot of lessons from a scale up playbook and start to apply them to the live games and we start to think these two areas of business are quite separate actually.
- [34:04]
B
Ilca dubbed the plan Two Birds, Two Stones. Teams developing new games would be treated like startups. They would have creative freedom and maintain a small, nimble headcount. The company also launched a new incubator called Spark, a 16 week initiative to test new game ideas, giving creators funding, mentorship and space to see if their concepts could grow into full fledged titles. Meanwhile, existing games would be treated like established companies. They would be given resources to grow their teams, going from around a dozen employees per title to 60 or 70. So they could iterate at scale and revitalize Supercell's classic games. These structures unleashed developer creativity.
- [34:49]
C
How do we make games that are always relevant? There's always kind of like something to do and something happen the game that means that we need to understand how to create more content and understand what our players want and continue thinking how do we improve their experience, how do we give them more value and how do we give them more fun and create those best in class experience that we're trying to create here? But also how do we strengthen their relationship with Hay Day as a game and as a brand and the messaging that the game is trying to create. I think the other part is we really challenged our vision. What does heyday mean? And just those small things. When we talked about Hay Day being a farming game, so is it just a farming game or how do we expand that even higher and bigger than that? We did a very long workshop in which we re looked at our vision, relooked at our strategy, where are we going? And started thinking, okay, how do we secure the next 10 years? How do we make sure that we continue on being relevant and continue to create this environment to as many people as possible so they could play it for a very long time and will remember it forever.
- [35:57]
B
Brawl Stars became the biggest winner of supercell's scale up strategy. It staged a remarkable resurgence, with revenue surging Eightfold in nine months between June 2023 and February 2024.
- [36:12]
D
Rebounds in gaming are unusual, always in every platform or category. So the rebound we saw around Brawl Stars was special in that sense too. Or unusual. Several years into its life cycle, all of a sudden it starts to add players engagement and revenue and it I think has a lot to do with the fact that it was just a little bit braver. I think that they really put some creative thinking to ways in which they interact and provide touch points with their customer base. There is a huge amount of effort that goes into building a sort of community around Brawl Stars. In evolving the different characters.
- [36:58]
A
Brawl Stars was the team that was the first one to scale up their headcount. They started to get a critical mass of a team and they learned how to work together and then they just made great updates to the game. Essentially made the game better for the players. And interestingly enough, now actually the other titles this year have followed suit. You just have to have that patience and you have to, you know, no matter what, you just need to trust the team. And that's what I'm actually super proud of.
- [37:25]
B
In 2024, Supercell also released Squad Busters, its first new title in six years.
- [37:32]
A
The Squad Busters, like, obviously it was a big moment for the company. They hadn't put out a game out globally in many, many, many years. So it was of course a significant moment for us. You know, one of the best things about being in games is the moment when you ship a new game. You know, it's just such a unique moment and it really doesn't happen that often. It's still early days for that game and we've been super open about like some of the issues that the game has and we want to make it better. And you know, the team has been making some bold changes but. And it's early days of course for the title, but it was a significant moment when the game came out.
- [38:11]
B
Since recording this interview, supercell announced it will stop developing Squad Busters. While Squad Busters didn't quite match the performance of Supercell's previous megahits, it earned $100 million in its first seven months. And along with the resurgent legacy, games helped propel Supercell to a record breaking year in 2024. In true Supercell spirit, it was the Squadbusters team who made the call. It seems more champagne is in order. From what I can tell from the outside, supercell is thriving. The company made a whole series of decisions early on to build games that endure in an environment or a market segment where there are many sort of one hit wonders or games that quickly gain and then wane in popularity. Supercell has been steadfastly focused on building for the long term, building games that users can enjoy for many years or even a decade. And I think that's truly remarkable. And it really sets them apart as people who think on a different time frame than their competitors.
- [39:22]
D
You have to imagine when Supercell was for 84% acquired by Tencent, it was worth more than Ubisoft. Ubisoft has 20,000 employees. And so it's just amazing exercise in terms of how successful people can be if you manage them correctly, if you find the right funding, if you match up with talent and have the discipline and the courage to kind of walk that all the way through. That's, for me, the legacy for supercell. Right? Never mind that it's in Finland, never mind it's on mobile. Those are cool things too. But it's really just the efficacy of small, creative people, well funded and on time.
- [39:59]
C
I think our legacy is to create games that are remembered forever, kind of like according to our mission, games that as many people as possible play for a very long time and remember them forever. And to make more than just a game, but really kind of like an experience that people can relate to.
- [40:21]
A
We come back to this concept of failure. And I just believe more than ever that when you encounter something that feels like a failure, you know, you actually don't know whether it's a failure or is it not. It actually might be the thing that will lead you to the next success. Games is a business that is super hard to, like, predict and forecast. So, like, you know, as a games company, really, like, what you should be focused on is, you know, just trying to have the best people put together the best teams and make sure that those teams can operate in the best possible culture. And in the best culture, you know, how I define it, is the best culture is one where these teams can have the biggest possible impact, meaning that nothing is on their way. And the culture is almost like a fuel that you pour to a fire. And, you know, it makes everything even better. And it's those type of things that, you know, I feel that they should be very focused on. And then, you know, if we keep on doing that as best as we can, every single day, every single week, every single month, then, you know, the outcome will follow. But you should really, like, be laser focused on the things you can control, which are like the people, the teams and the culture. And that is the most important thing that really matters.
- [41:49]
B
This has been Crucible Moments, a podcast from Sequoia Capital.
- [42:00]
C
Crucible Moments is produced by the Epic.
- [42:02]
B
Stories and Vox Creative podcast teams along with Sequoia Capital.
- [42:07]
C
Special thanks to Ilka Pananen, Maya Hafri.
- [42:10]
B
Joost van Drunen and Rudolf Botha for sharing their stories. Incidental audio provided by 11lab, a Sequoia partner.