Supercell Investments: Vision or Vanity?

talking about funding. So, Supercell launched officially, I mean, they've had this investment arm for a long time, but they kind of officially launched Supercell Investments. And for those who are watching, your head game is our endgame. We invest in creative independent studios and game tech teams striving to make truly great games that are played by millions of people for years to come. probably sounds very familiar since this is sort of a derivative of the Supercell's mission and it's interesting. I was today kind of going through their site and and like what is this about? By the way, here's Supercell's mission which is our dream is to create great games that as many people as possible play for years that are remembered forever. Anyways, so Supercell Investments, I think the most important question is not what, but why they are doing this. Is it that they're acquiring genre expertise? Not sure. Doesn't seem like it. Are they, you know, getting talent in through these investments? Not probably the one. Is it

a topline revenue play? Definitely not that one. Is it for profitability? For sure not. So, it was interesting to kind of understand why they're doing this. And they even had a full like a three paragraph section of why does Supercell make investments? And you can just summarize it to this one sentence. They want to help more teams to create games that are play for years and remembered forever. They love this. They love this sentence. They keep they keep like throwing this around like it's a like like they came up. No offense, but it's like the biggest I call it these things no does like do we all? I mean I I want to make really shitty games that people [ __ ] on on Deconstructor of Fun. Like I I I we chime in in a moment, but but I was kind of wondering like isn't this spark like they have this incubator program where they you can apply you get into a team and you're coming up with new ideas and that's one isn't the stuff

that they've been doing with offices like they do have offices in Shanghai that is making games that are probably you know going to be remembered forever when they eventually ship. They have a studio in Seoul. They have a studio now in London. So it's not that they need investments per se to help game teams to make these unique games because they would don't want to move to Helsinki like they are opening up studios everywhere. And also I was I was thinking about like they launched this site now it's 2025 but they started investing actually I believe in 2016 and the thesis was pretty much the same. It was Supercell's thesis. we're going to find teams that look like us, like smell like us, like talk like us, and we're going to invest into them, and they will become like us. And they did not. There was no luck. Like the biggest investments till date, if I'm correct, is Space Ape, and that's currently not active. Now it's called Supercell London. And then there's Metacor that got the credit line. Metacor is doing fine, but it's not category winner if

I'm correct. I think it's the fourth now in its category. And the real takeaway is not what investment Supercell has made. I think the real takeaway looking at nine years of investing is what they have not invested into because the past decade has been incredible bull run for gaming. Now we're not talking about the the last couple of years but but before that like think about the companies that got acquired that that Supercell had dibs on. Peak Games. Yeah, they they they were in that small giant here out of Helsinki. That was a billion dollar exit. No, the Supercell didn't grab that. You know, I've heard all kinds of stuff about other companies that are, you know, pretty prominent. I'm not going to name it, but Supercell investment team was part of all those conversations and instead it made a lot of investments into, you know, tiny little startups. And you know, kind of going back on that, it hasn't been that successful of an investment arm given how rich VCs and corporate venture capital has become during the last

decade. So to conclude on that, I'd say Supercell Investments is definitely net positive for the industry because they're giving money for startups. But to me like especially looking at this site supercellinvestments.com it feels like it's a investment club for supercell employees. You have a very small team actually that is operating it. I think just a handful of people you know great people smart people talented people but it's a very small team and several of them are actually interns and that team is smaller than most of the VC funds have. Then you have a lot of investments that are coming at preed and seed stages. So as the company is starting they're putting like the first money ins. So those are very very very early stage startups. A lot of them have actually you know died just like normally startups do. And the goal of this investment it says on one point that their goal is not to build a portfolio but a community. And so in the end at the moment Supercell has a very

interesting offering but I don't know if it really comes through. They don't really have that big of a team that can actually give you that information. And also being a great game maker does not make you a great game investor. and looking at that team that is making the investments like they're not people who have worked on games like they're I think the person that is heading it is exogenex which makes total sense but it's a little bit weird to say like you can access now the the full supercell knowledge and when they're talking about building this community I actually made you know a couple of calls to people who have investment from supercell and I was asking like you know how is it and of course all of them enjoy having supercell as their investor but I asked about the community perspective and they said they do have these events where they bring all the portfolio company in. But interestingly enough, at least in those limited conversations, they said that it was rare, at least for them, that employees from Supercell were present at these community events. So

essentially, it's the startups that are meeting each other, but you're not sitting there next to, you know, head of marketing of Brawl Stars. And they did say that there were points where they able to interact with Supercell employees about certain, you know, tactics and strategies, but some of these studios just said that that the advice that they got was just not applicable when you're a small studio versus if you're goddamn Brawl Stars. Like it's it's a totally different playbook. And what they're using, the agencies that they're using, the strategies they're using, the tactics. Like not anybody can just go in and do a Transformers and John Cena campaign. You know what? this month WWE because why not? It's like that that's great, but you're in an absolutely different, you know, league. So, my hope is that that Supercell Investments builds a strong strategy rather than a website full of visions and that they start making more real bets because I think this could be powerful especially how the market is looking. There's a lot of distressed assets or assets looking to get some

growth capital. Supercell has tons of capital and if they can build this into a type of an engine where the people can actually interact and be a part of Supercell and not this auxiliary force on the side that can meet with each other and create their little side community and eventually, you know, get absorbed partly to be part of Supercell. I think that would be a very interesting value proposition. But in the end, this is not Supercell's business. Supercell's business is to actually make those games that no [ __ ] people remember forever, make10 billion dollars and are played and so forth. Their business is not to run a VC fund on the side. And I think the size of the team kind of correlates with that. So Jen, what do you think? Yeah. No, I I you know I this is where I wish Crest was here because this is his his he's going to [ __ ] he's going to [ __ ] all over this. But from my perspective, it's like, is this really net positive for the industry? I mean, I sometimes we look at past results to predict future

benefits and Space Ape doesn't exist anymore. And you know, Supercell London is now what it is, but like what happened to all of that? And then Metacor, I think, is is actually has had some success, but didn't they have success? I don't know when they got investment from Supercell on that type of example. You've got in a sense, you're right, you have a company that is known for making games, not new games lately, and they're not having a lot of success in making new games lately, putting a lot of money into companies. Like, what is the benefit of taking money from Supercell versus a VC? And you're right, like exactly what you said, which is it's like the teams that are successful at Supercell cannot give actionable advice to these other teams that are up and coming because the life cycle and the stage of development is so incredibly different. I mean, I often say this about myself is, you know, when

someone calls me up and they're like, "Hey, how do you do this like grassroots community effort for a Steam launch?" I'm like, "Oo, I don't know. My expertise is like Triple A, you know, very different, you know, you know, getting the John Cena and the WWE and like I work with WWE making toys and making games. Like I can call them up today and do a deal, but if you want me to like get a bunch of like grassroots efforts going for community. Yeah. I mean I mean obviously I would know the agency to call to do that, but yeah. I mean it's it's an expertise thing. So I don't know. I'm just kind of like more money in our industry is great and helping more teams, but I think more money without like a strategy and a vision and a support structure feels questionable to me. Yeah, it's in this case like there's for example Sony has a corporate PlayStation has a Sony corporate venture capital but that mainly invests into different tools and tech that then enables their studios to produce interesting titles and games and

and kind of you know the the picks and shovels and they get the first view and can see how how that is developing out that element because that helps their core business. I don't know. It would be very interesting to get an like yes, there is that long form answer of why they're making these investments, but it's still it's like you're making investments so that there are more cool games in the world and because you want to create a community. Okay, so it's a hobby. All right, that's that sounds great. That's cool. Like you can do corporate responsibility stuff like we're building wells in Africa. That's not your core business, but it would be really good and it's net beneficial. That's how I see it. So this is kind of like the building wells in Africa initiative from Supercell because in the end like it's such a small you know drip in the bucket of of of the money that they're investing into this and how much they're making and and it doesn't really stress their game makers because none of them are part of the investment teams. All right. Well, we will get Crest's opinion on that when we're back.

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