Feb 12 2014, 6:12am CST | by Forbes
Finnish mobile game developer Supercell has reported revenue of $892 million for 2013, a significant gain on 2012′s revenue of $101 million. With just two games released (‘Clash of Clans ‘ and ‘Hay Day ‘), Supercell has seemingly cracked the winning formula in the mobile space.
CEO Ilkka Paananen firmly believes that this is down to the ‘people first’ approach of the company. “We believe the best people will create the best games,” he told the press this morning during Supercell’s earnings call, ahead of a disclosure filing required by Finland’s financial authorities.
“Money is not the reason we come to work each day. We come to work excited to build great games with amazing people. We view [the results] as validation for the great work that our people have done.” That validation comes in at revenue of $892 million; earnings before interest, tax, depreciation, and amortization of $464 million (due to Finnish regulation on the sale of virtual goods, Supercell is also reporting GAAP revenue of $889 million, and GAAP EBITDA of $322 million).
Founded in 2010, Supercell has hired 60 staff during the last twelve months taking the head count to 138, and now has three subsidiary offices around the world in San Francisco, Seoul, and Tokyo. The head office will be permanently in Finland. Supercell and Paananen have a strong belief in social equality. There are “no tax optimisations via holding companies” or similar arrangements and as such the company and its founders will be paying approximately $345 million in taxes to Finland.
Why? “The answer is simple, this is where we are from,” explains Paananen. “We have taken so much from the community we feel it is our time to give back to the community.” To go along with this principle, Pannanen also highlighted that retaining their Finnish Head Office and Incorporation in Finland was part of the negotiations with SoftBank (who invested $1.5 billion alongside GungHo in October 2013 , valuing the company at more than $3 billion.
During today’s earnings call, Pannanen also went into a little more detail about Supercell’s upcoming release of Boom Beach, which is only the third full release for the company. That low release rate should not be a surprise, given a culture that is built around extensive in-house play testing and internal rejection, as Forbes’ Karsten Strauss discussed last year:
Supercell’s developers work in autonomous groups of five to seven people. Each cell comes up with its own game ideas. They run their ideas by Paananen (he can’t remember ever nixing a proposal), then develop those into a game. If the team likes it, the rest of the employees get to play. If they like it, the game gets tested in Canada’s iTunes App store. If it’s a hit there it will be deemed ready for global release. This staged approach has killed off four games so far, with each dead project a cause for celebration. Employees crack open champagne to toast their failure.
Boom Beach has passed these test, with over 3,800 ratings on the Canadian store and reaching #5 in the Top Grossing Apps chart. That result has been duplicated in Australia, and the rest of the world’s iOS gamers will be able to play the title in March.
Supercell now has the financial resources, shareholder structure, and the mindset, to be able to make long-term plans. Part of the thinking behind taking on the investment from SoftBank and GungHo was to return money to their shareholders and reduce the pressure to go public in the short term. Supercell is looking to make a significant contribution, measured in years, both in the gaming space and in the Finnish start-up scene. They want to illustrate the measurable economic impact that start-ups can have to a nation’s economy.
And Paananen’s team want everyone to have fun while they reach for those goals.
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