Mobile game developer Supercell scores $1.5 billion pay day

The market for games played on smart phones and tablets heated up Tuesday when Supercell, the Finnish developer of “Hay Day” and “Clash of Clans,” agreed to give up controlling interest in itself for a $1.5 billion investment from Japan telecom giant Softbank.

Supercell agreed to sell a 51 percent stake to Softbank and its gaming subsidiary, GungHo Online Entertainment. Supercell CEO Ikka Paananen said in a blog post that Supercell will remain based in Helsinki and its management team will continue to work out of both Finland and San Francisco.

“This new partnership will accelerate Supercell towards our goal of being the first truly global games company, and gives us enough time to get there,” Paananen wrote. “The combination of tablets, mobile and the free-to-play business model has created a new market for games, one that will be accessible to billions of consumers, more people than ever before in the history of games. This truly is a new era of gaming and has opened up exciting opportunities for new kinds of companies.”

Indeed, according to research firm Newzoo, the global market for smart phone and tablet games is expected to grow 35 percent this year to $12.3 billion and is the fastest growing segment of the video game industry. Smart phone and tablet games are expected to make up about 28 percent of a projected $86.1 billion in overall game industry revenues in 2016, according to Newzoo.

The funding gives Supercell a bigger warchest to use against competitors like Electronic Arts and Zynga.

Supercell’s “Clash of Clans,” a combat strategy game, and “Hay Day,” a mobile farming game, rank near the top of the best grossing iOS games listed by app reporting service App Annie, right behind leader “Candy Crush Saga” from King games. Meanwhile, King announced Tuesday that it was expanding “Candy Crush Saga” to Amazon’s Kindle Fire devices.

Paananen said his company would remain independent and “continue to pay taxes in Finland.”
“Although we now have a major new investor in Softbank, it is extremely important to understand that we are still in full control of our future and will continue to operate independently. In fact, and this may sound surprising to some, I feel that with this deal, we’re now more independent and in control of our future than we ever have been,” he wrote.

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