INTRO: 10 years ago, Supercell was just about to
release Clash of Clans.
They didn’t know it at the time, but Clash of Clans would become one of the most popular
mobile games of all time.
They would follow up Clash of Clans with Boom Beach, Clash Royale, and Brawl Stars.
And before you knew it, Supercell became one of the most recognizable game developers in
the world.
And it wasn’t long until they started hosting tournaments and handing out massive prizes.
Despite this roaring start, over the past few years, Supercell has lost much of the
momentum that they once had.
Most of their games have lost the vast majority of their interest.
And we’re not talking about declines of 40-50%.
We’re talking about declines of over 80%.
Clash of Clans, for example, only pulls in 5% of interest that it once used to.
Similarly, Boom Beach only pulls in 4% of the interest that it once used to.
A similar story can be seen with Clash Royale as well.
The only major Supercell game that hasn’t suffered such a decline is Brawl Stars, but
even Brawl Stars is experiencing quite a significant decline.
On top of this, many of the new games from Supercell like Rush Wars and Hay Day Pop were
outright shutdown due to concerns regarding longevity.
And as for the games that haven’t been shutdown, well it’s not much better for them either.
Take Supercell’s latest game, Everdale, for example.
The interest in Everdale is so low that you can’t even see its graph relative to Clash
of Clans.
It’s not just Google trends that’s showing this trend either.
Socialblade paints a very similar picture.
Most of our favorite Clash YouTubers are only getting a fraction of the views and subscribers
that they once got.
In the past 3 years, Chief Pat’s subscriber count has only increased from 2.51 million
to 2.57 million.
His viewership isn’t that much better either, he’s only getting a few hundred thousand
views per month.
Back in his hayday, he would get more views on each video.
A similar story can be seen with Molt, Galadon, NickatNyte, ClashWithAsh, and so many more.
Now, I’m 100% sure that there’s gonna be comments down below that claim that Supercell’s
games aren’t dead and that they still have large player bases.
But, honestly most of these players are super fans or they do it as a job.
Virtually all of Supercell’s casual base has ditched their games.
So, while some of their games still have a decent number of players, there’s no question
that Supercell is not nearly as popular as they once used to be.
So, what happened to Supercell?
PAY TO WIN: One of the primary factors that made Supercell
games so popular in the first place was their unique mode of monetization.
Supercell didn’t charge users directly to play the game.
In fact, you didn’t even have to pay them a single dime if you didn’t want to.
Rather, Supercell made all their money from people who wanted to advance faster.
If you didn’t want to spend years maxing out your clash of clans base or collecting
a bunch of clash royale cards, you could spend money to speed up these processes.
This unique revenue stream allowed Supercell to create quite ambitious games.
Up until the release of Clash of Clans, virtually all mobile games were extremely simple and
rudimentary.
We had games like Temple Run, Fruit Ninja, and Angry Birds.
Given the limited revenue from these games, developers weren’t able to spend that much
on development.
But, with Clash of Clans, individual users were spending hundreds if not thousands of
dollars on the game which allowed Supercell to splurge on development.
This gave casual players an experience that they couldn’t find anywhere else.
No free game mobile or otherwise stacked up to the quality and experience of Clash of
Clans.
Aside from being extremely accessible to casual players, casual players felt like they could
do well in the game without spending any money on it.
Sure, they might not become a top player in the world, but it was realistic for them to
max out their bases within a few years.
With time, however, we saw updates that made this more and more difficult.
A perfect example of this is wall upgrades.
To max out walls, you had to spend 4 million gold per wall unit.
Only people who played clash of clans know how big of pain this was.
For the rest of you, I’ll put it in dollar terms.
To max out your clash of clans base, it cost $11,000.
And out of this, nearly $5,000 would go towards simply maxing out walls.
In other words, nearly half the game was simply maxing out walls.
I don’t think I need to explain why this made the game extremely tedious and frustrating
especially for late stage players.
And honestly, the only reason Supercell made it so hard to max out walls is because they
knew that the top players were willing to spend whatever it took to max out their bases.
So, this was an easy $5000 from each top player.
While this was extremely profitable for Supercell, it didn’t take long for players to feel
that Supercell’s games were becoming pay to win.
And this become even more evident with Clash Royale.
Not only did you have to spend insane amounts of money, but you also had to gamble a bit.
You see, when Clash Royale was launched, you couldn’t just max out each of your cards
one by one.
Instead, you had to buy chests that gave you a random set of cards.
So, if you wanted to max out your account, you had to keep buying chests until the random
cards happened to be exactly what you need.
And on average, this ended up costing nearly $30,000.
Considering this, I don’t think you’d be surprised to hear that the vast majority
of players never played these games to the end.
DISTRACTIONS: Aside from it becoming virtually impossible
for casual players to max out their accounts, we also saw several distractions appear for
these players.
While Supercell was one of the first companies to leverage this freemium business model,
they were by no means the last.
Given the insane popularity of Supercell, basically every game developer became aware
of this alternative mode of monetization, and it didn’t take long for them to launch
their own offerings.
Some of the biggest competitors include Pokemon Go, PUBG Mobile, and of course Fortnite.
Not only did these games also offer a high quality experience for free players, but they
were arguably more fair.
Take Fortnite for example.
While you could spend tens of thousands of dollars collecting every skin in the game,
this would give you absolutely no advantage when it came to playing the game itself.
A pro player could start a new account and their chances of winning would still be identical.
As these newer games started to gain popularity, it was only natural that people started leaving
older games.
It wasn’t just newer games that were siphoning Supercell’s user base either.
Another major culprit was social media.
When Clash of Clans came out, mobile social media was in its infancy.
We were just starting to see apps like Instagram and Snapchat come out.
So, the vast majority of smartphone users weren’t using their smartphones for social
media.
They primarily used it for productivity or gaming.
But, over time, social media has risen to become the number 1 use of smartphones.
Many of the largest social media platforms like Instagram and WhatsApp boast user counts
in the billions.
And as people started flocking over to social media apps, it just became even harder for
Supercell to hold onto their users.
To make things even worse, Supercell wasn’t just fighting against other mobile apps either.
Over the past 5 years, we’ve seen quite a surge in pc gaming mostly thanks to AMD.
You see, in 2017, AMD launched a new series of CPUs called Ryzen.
And since it’s release, Ryzen has substantially reduced the cost of PC gaming.
This has prompted more people than ever to switch over PC gaming, and this trend has
simply been accentuated by the pandemic which forced people to stay at home.
So, in the end, many of the casual gamers switched over to social media.
Many of the amateurs and enthusiasts switched over to PC gaming.
And as for the remaining mobile gamers, well they now have more quality options than ever.
CASH OUT: So far, we’ve primarily discussed factors
that have led to gamers ditching Supercell, but there’s also an argument to be made
that Supercell has ditched gamers. 10 years ago, Supercell was a small gaming startup
that was trying to hit it big.
They were hungry to launch the next big game and make their mark in the industry.
But, now they’ve already done that.
What’s the motivation to achieve something even bigger?
Also, we should note that Supercell’s leadership brilliantly sold the company at the peak of
their popularity.
In June of 2016, Tencent agreed to buy 84% of the company at an $8.6 billion valuation.
While this was a great financial move for the company’s leadership and OG employees,
this was likely not a very good move for the company’s spirit.
You see, Supercell only had a total of 340 employees which means that the buyout was
worth $25 million per employee.
This means that unless you joined months before the acquisition, you likely received at least
a 6 figure payout.
Meanwhile, employees that had been around since the beginning likely received 7 figure
payouts if not multi 7 figure payouts.
In other words, the vast majority of Supercell employees became well off if not completely
financially free.
While this is an awesome outcome for any startup, it also drains the company of much of its
motivation.
A perfect example of this is Dell.
10 to 15 years ago, Dell was facing a relentless decline and Michael Dell even came out of
retirement to save the company.
And one of the biggest issues that he found was that many of Dell’s employees simply
didn’t care.
They didn’t care about the future of the company nor did they care about being fired.
You see, Dell stock had minted 2700 millionaires many of which were decamillionaires.
In fact, this was so common that people called them dellionaires.
To combat this, Michael had to take Dell private, layoff significant portions of their workforce,
and pivot to the server market.
I don’t know about you, but I don’t think Supercell is likely to go through such an
evolution.
To make things worse, I don’t think their parent company Tencent cares all that much
either.
While $8.6 billion is an insane amount of money for us peasants, it’s simply a calculated
risk for Tencent.
Tencent has a market cap of over $400 billion and that’s after crashing over 50%.
So, I don’t think they’re super motivated to turn around Supercell either.
From their perspective, they have stakes in dozens of gaming companies, and they just
need a few of them to do really well to make up for such losses.
So, it’s really up to Supercell alone to save themselves.
FUTURE OF SUPERCELL: In the end, Supercell is one of the most iconic
and nostalgic game developers in the world.
Most of us have atleast tried one of their games if not played them for years.
But, in recent history, Supercell hasn’t been doing all that great.
Their trend towards pay to win has shunned away a lot of players.
Not to mention all the extra competition they’ve been facing from other game developers and
social media.
These issues have likely only been worsened by the buyout which probably softened morale
and spirit amongst employees and executives.
Now, it’s not like Supercell is struggling to make money.
They’ve introduced several sources of recurring revenue throughout their games.
So, the remaining players are likely quite profitable.
But in terms of returning to their former glory, it’s really just a coinflip.
Supercell’s best bet is to just continue launching games and hopefully one of them
will pick up steam.
But, if not, they’ll probably just end up supporting their most popular games until
they eventually become unprofitable themselves at which point they’ll shut these down as
well.
But, fortunately, these games likely still have several years left before the become
unprofitable, so Supercell has quite a bit of time to figure something out, but only
time will tell.
Which Supercell game is your favorite?
Comment that down below.
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