Supercell Boss Criticizes the Gaming Industry for Lack of Innovation and Focuses on In-House Development

The mobile gaming industry stagnates while other entertainment sectors grow. Ilkka Paananen, CEO of Supercell, the Finnish developer behind Clash of Clans and Brawl Stars, criticizes the trend of focusing on acquisitions instead of their own innovations.

Some companies have resigned themselves to the fact that it's too difficult to bring new games to market," Paananen told the Financial Times. "Instead, they rely on an M&A strategy where every successful new game is simply bought. This is a big problem.

Supercell, known for its selective development approach, has only released six titles in the past ten years but in 2024, with Squad Busters, the first new game in six years. Despite this strategy, the company achieved a record year in 2023: Revenue increased by 77 percent to 2.8 billion euros, while operating profit before depreciation (EBITDA) grew by 76 percent to 876 million euros.

At the same time, the industry is increasingly focusing on consolidation. In 2022, Take-Two Interactive acquired FarmVille developer Zynga for $13 billion. Microsoft bought Activision Blizzard, which had previously acquired King, the studio behind Candy Crush. Tencent, which has majority-owned Supercell since 2016, as well as Playtika, have also acquired numerous smaller studios.

Last year, Supercell fully acquired the British studio Space Ape, but remains true to its philosophy: Small, autonomous development teams, known as "Cells," work independently on games, with the number of employees increased by one third to 686 in 2023.

Paananen demands a rethinking: "The industry must ask itself why we fail to create truly new, innovative gaming experiences. We must be prepared to take more risks.