Supercell's Super Sale: Tablet Game Maker Gets $1.5 Billion Stake
Japanese telco SoftBank and games company GungHo have made a $1.5 billion strategic investment in the maker of the "Clash of Clans" and "HayDay" titles for tablets. The size of the investment reflects the stature and profitability of these two lone titles from Supercell, which grossed $179 million in the first quarter of 2013, according to Guardian.com.
A blog post from founder Ilkka Paananen explained that the level of investment and enthusiasm for a tablet-first gaming company also reflected the unique intersection of gaming with mobile technology. “The combination of tablets, mobile and the free-to-play business model has created a new market for games -- one that will be accessible to billions of consumers, more people than ever before in the history of games,” he writes. This truly is a new era of gaming and has opened up exciting opportunities for new kinds of companies.”
He says that 80% of the investment comes from SoftBank, and will help them widen distribution of the games. Game maker GungHo produces one of the only other mobile titles that rivals "Clash of Clans" in scale: "Puzzles & Dragons." The two companies have collaborated before. Supercell's management team will remain in Finland. Paananen said in his post: “I think more and more people in this country are realizing that there is life after Nokia!”
The investment comes on the heels of King.com, maker of another mobile gaming hit, "Candy Crush Saga," which fills a confidential IPO proposal with the SEC in late September. It also shows the velocity with which attention has moved from other gaming platforms to mobile. As both Sony and Microsoft are poised to release their next generations of dedicated gaming hardware in the next month even as most market forecasters see mobile and PC platforms driving growth, especially in international markers, in the coming years.
While the Xbox One and PlayStation 4 have sold out their pre-orders pretty much everywhere you look, that is to be expected after hardcore gamers waited five and six years between generations. Sony is predicting it will sell 5 million PS4 units by March, which is less than the 6 million they had projected for the PS3 initially -- and they missed that original target back in 2006, according to Gamerant. The rival platforms are coming in at hefty $400 (PS4) and $500 (Xbox One) price points, and each is aiming for set-top-box functionality. In both cases, these platforms are leveraging tablets and smartphones with second-screen functionality.
But is this the last great push for console gaming? The momentum clearly is with social forms of gaming and games distribution that seem to favor both PC and mobile platforms. Not only is sharing a title and simultaneous gaming with friends baked into mobile operating systems, but everyone walking around in public playing a game is a walking ad for it. “What is that you are playing?” is probably one of the most effective channels of game distribution we can’t measure.
But the rise of mobile social gaming also underscores something about the full gaming ecosystem that only became apparent in the last decade. It really isn’t about the hardcore gamer anymore. Gaming is a part of the general entertainment environment. I have been covering gaming, and even writing in the industry, for a decade and a half. It still seems to me that we are uncomfortable with gaming as a medium. At least a generation has been raised on video gaming of all sorts and have absorbed its franchises and characters, the memories of playing with friends, as surely as my generation absorbed TV as a fundamental part of our identity and upbringing. Still, we don’t know quite how to fit it in. Marketers still fumble around to find ways to integrate brands into the gaming experience because the genre just doesn’t behave like other media. It resists interruption.
And somehow, as a culture we still don’t know how to integrate gaming with the rest of our entertainment news cycles. Do the developers of "Call of Duty" or "Candy Crush Saga"
show up on late-night talk shows to tout their new releases? Nah -- even though each of these franchises is good for more cash flowing through the ecosystem than most weekend film releases. And yet
the levels of engagement, time spent, social sharing, conversations, anticipation, reflection, critical discrimination focused by gamers on their passion still should be envied by any other
Gaming cracked the code on consumers a long time ago. As marketers and media critics, I don’t think we have come close to cracking the code on understanding and integrating it yet.