Clash of Clans maker Supercell: 'You can't design fun on a spreadsheet'

Finnish developer Supercell launched its first two mobile games – Hay Day and Clash of Clans – in the summer of 2012. In the first three months of 2013, those two games alone made the company $179m (£116.7m) in revenues.

That's why mobile gaming is such a simultaneously exciting and terrifying industry to operate in right now, and Supercell isn't even making the most money. Japanese firm GungHo Online made $303m in revenues in the first quarter of 2013, with the majority of them coming from a single mobile game: Puzzle & Dragons.

Now these two companies are working together, with a cross-promotional campaign with Clash of Clans characters appearing in Puzzle & Dragons, and potentially a reciprocal arrangement within Supercell's game.

On one level, Supercell and GungHo are rivals, but they're also partners, which should be causing the odd headache within big games companies from EA and Activision to Zynga.

The rise of Supercell in particular has been meteoric. Hay Day was released on 21 June 2012, then Clash of Clans on 2 August. By mid-April 2013, Supercell was pulling in $2.4m of daily revenues from its 8.5m daily active players, and raising a $130m funding round that valued the company at $770m.

"We've been surprised. None of us could have imagined how quickly this would happen," says Ilkka Paananen, Supercell's chief executive.

It's a far cry from his previous mobile games companies. Finnish studio Sumea, which was bought by US publisher Digital Chocolate in 2004, specialised in quirky, characterful own-IP games of the kind that would later prosper on Apple's App Store.

Yet it was making them at a time when the dominant mobile games stores were those run by mobile operators, where quirky, characterful own-IP games tended to sell badly – if they were stocked at all.

Digital Chocolate had some success on iOS and then Facebook, but Paananen left in 2010, then launched Supercell in 2011 to make social games on Facebook, starting with a game named Gunshine. It never quite took off, but one year and a "tablet-first" pivot later, Hay Day and Clash of Clans launched.

"Our growth speaks a lot about the platform that we're on, and how quickly games can spread organically," says Paananen. "It's also been exciting for me personally to see how global this business has become: we've been at the top spots in Western countries, but also number two in China, and in the top five in Japan. That's really exciting."

Free-to-play gaming

Supercell's rise has been interwoven with the explosion in free-to-play (F2P) games on smartphones and tablets: a trend that's caused plenty of tension within the games industry.

The key argument is over whether many of the most successful F2P mobile games are little more than money-sucking "monetisation machines", where the design is almost entirely geared towards forcing players to spend money. Gambling-style addiction, without even the prospect of a payout.

For the most part, Supercell's games have swerved this criticism, yet still managed to make lots of money. How? "The huge irony here is that if the monetisation is not your number one priority, that actually leads to better monetisation," says Paananen.

"When you prioritise engagement and retention – making a great game that people play often and want to play for a long time – they are happy to pay. We want to design games that people can theoretically play for years."

Paananen is quick to stress that Supercell is just the latest in a long line of games firms with this objective, and mentions World of Warcraft and League of Legends as two franchises whose longevity his company is keen to emulate.

He also has some sharp words for some of the trends in social and mobile/F2P games that have hinted at other motivations, as well as companies focusing too much on analytics as a guide for their design choices.

"There was a time, especially in the social games industry, where people thought you could create great games based on a spreadsheet: that creativity and design wouldn't really matter, because it was all about some maths," says Paananen.

"Games are still a form of art, not a form of science. You can't design fun on a spreadsheet. And if you want to make an industry for the long-term, if you can't create fun games, there's no future."

I'm sure analytics still play a significant role in Supercell's business, in terms of watching closely how people play Hay Day and Clash of Clans, and taking design decisions at least partly based on that.

In other words, Paananen's criticism isn't of analytics per se, but of the trend he saw for analytics without the art.

Supercell has talked publicly and regularly about its company culture: small teams organised in "cells", with the freedom to work on new game ideas, test them and – if the team decides they're not worth pursuing – gathering the company together to toast the lessons learned with champagne.

GungHo partnership

Supercell currently has just over 100 employees, and Paananen says it's determined to "stay as small as possible" on the grounds that "smaller companies are more fun, and happier people create better games".

"Having small teams in the console space is hard. The Minecraft guys are an exception, of course, but it's tough to have small teams if your goal is to do cinematic action titles for next-generation consoles," he adds.

"But those movie-like experiences aren't what people are looking for in mobile. What users really value is the gameplay and social aspects of the games, and that enables you to keep the team smaller, and move quicker."

One example of moving quickly is Supercell's GungHo partnership, given the rapid rise of the latter's Puzzle & Dragons (even if GungHo itself is a well-established publicly-listed company in Japan thanks to its online gaming business).

Paananen says that the partnership came about through seeing GungHo boss Kazuki Morishita speak at industry conferences – "I really admired how humble he was about everything" – and the sense that the two companies' cultures might mesh well.

"We were interested in the Japanese market, so we got in touch with them, and there was an immediate connection on a personal level, but also on how we both think about game design. So we decided to do some cross-promotion," he says.

Such collaboration has been quite common in the independent games world. Doodle Jump and Pocket God crossed their streams in 2009, for example, as did Minigore and Sway, while Braid character Tim made a cameo appearance in Super Meat Boy.

The difference with Clash of Clans and Puzzle & Dragons is that they're two of the most lucrative mobile games in the world right now, with the latter providing the former with a valuable introduction to gamers in Japan.

Big traditional publishers rarely do this kind of thing – although the Mario and Sonic games show it's absolutely possible – which Paananen suggests is often due to "short-term thinking" relating to financial goals.

"Companies run on these quarterly goals which they absolutely have to meet, but that creates a lot of pressure and short-term thinking," he says.

"But when you think a bit more in the long-term, why wouldn't you co-operate with guys like GungHo? Players of both companies have really appreciated it. It shows that sometimes one plus one can be greater than two. I don't realise why some other companies don't do it."

Asian expansion

Japan is high on Supercell's strategic priorities, too, with Clash of Clans having reportedly tripled its revenue there since the cross-promotion started, which in turn came just after an update to the game with support for Japanese language.

"It's a very interesting opportunity for us. If you think five years ahead about what the most valuable games companies will look like, they'll need to have a strong foothold not only in the Western markets, but in one or two of the big Asian markets: Japan, Korea and China," says Paananen.

"One of our goals is to create the first fully-global games company, which has players both in the West and in the big Asian markets. We still have a very long way to go, but the signs have been very promising."

Does being big in Asia mean also being big on Android? Supercell is still an iOS-only developer, but Android is huge in China and South Korea in particular. Will the company's desire for Asian expansion mean Western Android users get to play its games soon?

Paananen plays the straightest of straight bats. "You are quite right in saying Android is pretty big in Asia, but right now we don't have anything to say on that front," he says.

"We are, of course, keeping our eyes and ears open for different platforms, but I would say also that iOS is a pretty big platform in our experience in both Japan and China."

Supercell is thinking hard about how its two current game franchises can expand in other ways, though. Mobile brands like Angry Birds, Talking Friends and Cut the Rope have all explored animation, toys and other merchandise.

When might we see Hay Day plush toys or Clash of Clans cartoons or comics to match? Paananen says Supercell will be "pretty cautious" when it comes to licensing and merchandising, but the company is clearly mulling its options.

"We've had lots of requests coming in, and we've said no to the vast majority of them. But hopefully this year we will try something on that front," he says.

"We're going to be very, very choosy, and it'll be as high-quality as possible: something our players will feel is authentic and part of the game experience. We want to do something cool though: not just the games, but something extra."

At the end of the interview, conversation turns back to the often-heated debate around F2P games, and whether too many are trying to take advantage of their players rather than delight them. This, alongside the separate-but-related debate about the way in-app purchases are used in children's games.

Paananen thinks developers can't afford to shrug off the criticisms. "It's such a new industry, you have to do what's right for players. Some of the negative PR around free-to-play stuff has been a shame," he says.

"It's really up to us as an industry to get pro-active about this stuff and do things that are right for our players. If we don't, someone else will come in, and there's going to be legislation."

The Supercell boss is broadly optimistic though, and thinks that as better games continue to be released, the good companies will prosper, and the short-term moneygrabbers will fall away.

"The irony here is that the free-to-play model should be a win-win situation for consumers and developers. There have never been such high-quality games available for users to enjoy and try out for free," he says.

"And it's an efficient business model when done right, as you can see from guys like King, GungHo and us. It's just a case of knowing what's right and what's wrong, and being more pro-active about it."