Inside Supercell: Old Guard, Rotating GMs, Sparks, Labs, and Silos.

[Music] Phil wanted me to read this. So, this is from our newsletter. Supercell Squadbuster has gone from a massive launch to several pivots until finally being exiled to a team in the UK for mouthto-mouth resuscitation.
Resuscitation.
In the last Twick, the game got Philip Black body shot. His takedown was sharp, pointing to the dangers of being good but not clash in a portfolio built on lightning in a bottle. Supercell has the luxury of swinging for the fences, but that also means misses look bigger than they are. The moment reflect a deeper truth. In a hip-driven business, even the best lose rounds. What matters is whether the next swing is bold enough to put them back on top. End quote from Phil Black in Super Souls World. Good isn't good enough. So, Phil, what am I correcting?
Mishka, I've said none of this. I've literally highlighted all the lines that were AI generated. I've said none of

these things.
Yes. Yeah. So, this is AI generated. What we've done is as anybody is we run the transcript of our twig and put it into a newsletter and AI lies if you didn't know. And so we will be much more focused on figuring out the lies. But uh essentially we're trying a new concept where we we start sending weekly twig newsletter in addition to our existing it's for the same subscribers kind of summarize the news and we'll have a lot of different clips but this one had all the things that Phil didn't say but kind of you said it right.
Sure.
In a more entertaining way. What did you say?
Different texture. Different texture to some things. I don't think you need to be Clash. And I never thought Squadbusters was good but not Clash. And I don't think Supercell's portfolio is built on lightning on a bottle either. Uh anyways, okay. Since that episode, a bunch of people have reached out. There's a couple corrections that I'd

like to start with. One is I mixed things up and I thought the Squadbusters game was shipped to London to the Space A team. That was not the case. They actually shipped a London GM to Helsinki to help run the game. I would say the other thing that was clear amongst the feedback I heard from from sources I trust is like well yes they want to IPO so no surprises there we've talked about there's just a lot of consensus there
for a year now
for yeah for a year Squadbusters has been a show from the start to the finish people refused to kill the game that has been affirmed by all these sources and that the game is basically dead and it's going to be a fate similar to Boom Beach where they're going to ship it to an outsourcer because they just refuse to cleave the head And so the problem a lot of people identified was that the incentives can be messed up because there's such a brutal process to get a game global that these soft launches can go on forever that you know skipping these launches is actually just a way to survive, right? Because if you yolo it and you get the

game out there, then you guarantee a life for yourself. You guarantee something a product that actually gets to hit the market rather than spending year after year toiling away and soft launch. The unfortunate thing was that a lot of people pointed out that they felt like Supercell's old guard was holding back the company and silos were forming, which meant that it's hard to get one complete picture of Supercell. There just so many different Supercell cultures that are now spread out across all those different locations. And a lot of them have been led by Ilka's lieutenants, people who were really important to the early forming of Supercell. And they're well paid. They're having a good time. And sometimes they can be resistant to change and that slowed them down. When you look at something like Clash Mini, that that game got was from Shanghai, right? Remember that was the one of the first big Supercell expansions, right? Remember there was San Francisco for UA and Shanghai was supposed to be a proper game development studio. Clash Mini was a product that they worked on for a very long time and got to a very good state. Supercell refused to release it and then

they go ahead and launch Squadbusters without a soft launch. That is I think insulting and you know that's unfortunate. The thing I will say that people were excited by is that there's some new GMs coming in and this new blood could be really healthy for the company as well as removing some of the GMs who are not successful in adding to the culture. So I think there's some bright side to this too and let's see where everything lands.
Did you hear anything about North America?
I would say let's keep things positive. Let's keep things positive. All right. Say,
let's just leave it at that.
Okay. Uh, North America, let's talk about it later. I have a I have a question. So, kind of looking at Supercell's revenue charts, the revenue is climbing towards the heights of 2024 when Brawl Stars was doing phenomenally well. Phil, here you're showing just the uh the the Clash Royale uh revenue data, but basically what you're seeing is massive climb of revenue and also

massive climb of downloads, which supercell never talks about and of course everything is organic because you don't attribute things, but this is very interesting. Do you think Clash Royale will continue this rise and kind of be the game of 2025?
A lot of this being is being driven by, you know, pumping up UA, right? So like they have tons of downloads coming in. So like the revenue is going up associated with downloads similar to what happened with Brawl Stars, right? But Brawl Stars came right back down. And I would imagine this is coming right back down. And so in in some sense like an IPO is possible. The market is really frothy right now. So this is the time in which they could get out. It is possible, right? I I think it's far more important how they maintain growth, not this fact that they're actually growing by, you know, burning the ships by by doing all this UA. You know, if this is like kind of a pump and dump where they're going to see the same type of performance they saw out of Brawl Stars over the next 6 to 12 months, that's not going to be a good thing. What they need

to do, and I've said this a gillion times, it's nothing new. They need to build organic growth with new games that deliver revenue and earnings, right? That's it. I mean that that that's the goal is to build new games that drive revenue, right? This is what Supercell hasn't done in over a decade, you know? So like they keep re-energizing old games but not actually creating anything new that's sustainable, you know, since since a long time ago. Are you Wait, are you serious? But that's
When's the last game that was sustainable? I
I don't disagree with you, but that's their their their story has been can they scale these forever franchises and inject them with new blood? Like that has been that's been their story is like can I take a team like Clash of Clans like that Clash of Clans by the way is up in terms of headcount. They've kept it going at incredible run rate. Clash Royale is part of the scaling story too. Brawl Stars is a part of the scaling stories.
No, no. My point is it that that's not a good story.
Why is that not a big story? Is like we're getting the factory going on our biggest franchises. You've got the

Netflix trans media coming. Say what you will about it. The IP has grown. Why isn't that a part of their story? Like I get they haven't shipped new games. It sucks.
They're not sustaining it. Like Brawl Stars is falling off a cliff right now, right? After that huge story. So that doesn't mean it wasn't a profitable thing to do even if it's coming down, right? They it could have been a profitable campaign and then they just dried up CPIs. I I think you're attributing Clash Royale to UA. I don't know where that's coming from. Look at the downloads. The downloads are of course there's always a symbolic relationship between an increase. Of course, they're looking at rorowaz. You're playing on rorowaz. Of course, if the game gets better at monetization, download should increase. Of course, that's the mark of good success. And we just don't know what the order of operations is.
I have a hard time imagining they're just eating margin for this expansion. I I don't I don't believe that to be the case. They've been laying the groundwork for this in Clash Royale. They've made changes to cart evolution. They made changes to these lucky box systems.

They've pulled back on free rewards. They've gotten their economy under control. They've done real things in the game economy.
They did the same thing with Brawl Stars and now it's like back to where it was before.
Different feature set. Look at I don't know if this is just a UA push or this is a sustained increase. If you look at revenue, they've had level shifts up in daily revenue when they've launched features.
Let's think even if they're successful in this process, I don't think this is sustainable from from an IPO perspective.
I agree. It's not a good story. It's not a good story.
So that's my point. That's my main point. So I don't know why we're arguing because like if they can't build new games and scale them, then they are not a publisher that's worth it worth their salt. Right. Yeah.
Having said that, like I think people's push back will be, well, look at EA, look at Take 2. All they're doing is rehashing old games, but they're actually building new all the time, right? So GTA 6 is different than GTA 5, even though they're the same IP, right? So, like, and in theory, GTA 6 will be bigger than GTA 5 in that sense. But EA

is more like iterative, right? But they release a new game every year. Even though it's FIFA and it's the same game by almost all measures, is still new and monetizing better. And this year looks like it's going to be amazing actually for monetization.
Do you think they should buy something?
Yeah, D. What do you think they should buy this forever?
Buying buying capability.
Who Who do you think they should buy? Who they should have bought peak?
Who do you think they should buy now? Put put a whole news behind them. Who do you think they should buy now? Right. That would be interesting. Who would they
They should buy Dream. They should buy Fund Plus. They should
You think they could buy Dream? How much do you think Fund Plus would be interesting? How much do you think Dream would Fun Plus is portfolio is too big? What about Dream though? Dream seems interesting. How much do you think Dream you think they were in competition with equity firm?
No, because Supercell's not exquisitive. They they should have been acquiring all along and building more capabilities and bringing like building a juggernaut of
well the irony is is Ilka said Gardcape should have been them. Remember he said this a really long time ago that he was disappointed that they didn't do that innovation. Why didn't he just go out and buy it?

They had the possibility to acquire all these companies back in the days.
It's pure arrogance. Absolute pure arrogance in their abilities and capabilities which is completely
No, not really. It was more like they thought that they weren't an acquire. They didn't have the organization to acquire companies and consolidate them because back in the day Supercell was really small like no today.
Fair enough. Fair enough. Anyways, that's Supercell. We talk about you because we love you. We want you to do better. This is not a talking thing about Supercell. We're content creators that are fans of the platform. So, Supercell, we want you to succeed.
I don't want to be a content creator. Please.
All right. Moving on. [Music]