Tales of the Tape #10: The $10 Billion Company Built by Killing Games Relentlessly
Welcome back to Tales of the Tape.
This week, I dove into Sequoia’s Crucible Moments conversation with Ilkka Paananen, CEO and co-founder of Supercell. If you’ve played mobile games in the last decade, you’ve almost certainly played something Supercell made: Clash of Clans, Clash Royale, Hay Day, or Brawl Stars.
Before we start: some context on my relationship with mobile gaming. I joined Bigpoint (acquired by Yoozoo) specifically to learn about web and mobile game development, spent time at Bandai Namco working on mobile titles (the European ones, ie, the less successful ones :D), and put serious hours into Fire Emblem Heroes, Dragalia Lost, and Honkai Star Rail. So when I say Supercell’s approach is worth studying, it’s coming from someone who played a lot of mobile games, but also spent time working and trying to understand them.
That said, their story stands out even in a crowded market. They built a company valued at over $10 billion while maintaining an incredible efficiency and a very peculiar method of development - see below.
This conversation offers something rare: insights from someone who made every mistake in the textbook before figuring out what actually works in game development.
So, shall we?
The $12 Million Bet That Almost Failed Immediately
Here’s how most startup pivots happen: a company quietly shifts strategy, spins the narrative in a blog post (Note: I wrote a few of them…), and pretends everything was according to plan. That’s not how Supercell did it.
Ilkka raised a $12 million Series A in 2011 based partly on the promise of Gunshine, a Facebook-connected browser game designed to work across platforms. A few months later, he called his investors to deliver two pieces of news: the game wasn’t working, and the entire platform strategy they’d invested in was dead.
“We probably could have built a reasonably sized business, even with the existing strategy, focusing on Facebook games and slowly iterating. But it wasn’t anywhere near close to our ambition.”
But here’s what made the decision clearer: Facebook was already closing down the spam-based growth tactics that made social games work. The platform that looked like the future in 2010 was already showing cracks by 2011. Meanwhile, touchscreens weren’t just a novelty anymore - they were becoming the primary way people interacted with games.
The decision to kill Gunshine and go all-in on mobile became the defining moment of Supercell’s history. Without it, they’d probably be another forgotten Facebook game developer
The Inverted Pyramid That Actually Works
Most game studios operate like traditional companies: executives at the top set strategy, middle management translates it into projects, and developers at the bottom execute the vision. Supercell flipped this completely.
“What if you would found a completely new type of games company and almost flip the organisational chart upside down? Instead of upper management owning the vision of what type of games the company produces, what if that vision would be owned by the individual game teams?”
They structure game teams as independent “cells” (Super…Cells? haha.) - small studios within the company that operate like their own startups. These cells have full creative control over their games, including the decision to kill projects that aren’t working.
The comparison to record labels captures it: managers don’t tell artists what to play, so why should executives tell game developers what to make?
Most companies talk about empowering teams. Supercell actually gave them the power to fail.
Celebrating Failure with Champagne
When Supercell killed their first mobile game, Pets vs. Orcs, the team lead gathered everyone to share what they’d learned. Ilkka showed up with champagne.
“I was thinking to myself that it’s probably gonna be a bit sad. So what could I do to kind of cheer it up a little bit? I just had this idea that I’ll get a few bottles of champagne and give them to the team.”
The champagne became a tradition. Every cancelled project gets celebrated with champagne and a company-wide post-mortem on what was learned.
This isn’t just feel-good culture nonsense. It’s a mechanism to make failure less painful and extract maximum learning value. When the entire company sees cancelled projects as experiments rather than failures, people take bigger risks. When you celebrate the learnings publicly, the knowledge spreads.
The philosophy is simple: fail early, fail smart. Get to players as fast as possible to test if something works. If it doesn’t hit specific metrics thresholds, kill it and move on. Supercell cancels a significant portion of their projects - this isn’t a bug, it’s the system working as designed.
Compare this to most studios, where cancelled projects are quiet embarrassments that everyone pretends never happened.
The Metrics That Proved Everything
When Hay Day launched in summer 2012, the metrics were so good that Ilkka thought their analytics system was broken.
“The first metrics start to come in, and they were just incredibly good. We had never seen anything like that before. They’re actually so good that for the first few days, we thought there’s something wrong with our analytic systems.”
Clash of Clans followed a few months later with the same result. Suddenly, they had two games generating $2.4 million in daily revenue.
This metrics-based approach came from Supercell’s core philosophy. They’d release games in small markets, measure retention and monetisation against specific thresholds, and only proceed if the numbers hit their targets. If metrics didn’t scale, they’d kill the project regardless of time invested.
Every morning, they send a company-wide email with all metrics for all titles. Complete transparency on what’s working and what isn’t. No hiding behind vanity metrics or selective reporting.
The SoftBank Deal That Everyone Misunderstood
In October 2013, SoftBank acquired 51% of Supercell for $1.53 billion - giving up majority control just three years after founding. On paper, this looks like founders cashing out and losing their company.
In practice, it was the opposite.
“(Masayoshi Son, CEO of Softbank) said that, ‘Well, that’s perfect, because I just want to partner with you guys. I’ll give your VCs some liquidity, and let me buy 51%. And even if I own the majority, I’ll give all the control back to you guys - the founders. Because I don’t really know much about games. I trust you guys, and all I want is that 51% economic interest.’”
Masa Son structured the deal to give founders full operational control despite owning the majority. Just patient capital that wanted exposure to mobile gaming’s growth without meddling in how the company operated. Three years later, Tencent led a consortium to acquire 84% for $10.2 billion - making Supercell Europe’s first decacorn - while maintaining the same independence structure.
Think about how rare this is. Most acquisitions result in “integration” that destroys what made the acquired company special. Supercell got billions in capital and access to Asian markets while operating as if they still owned the company.
The Asian Market Challenge
Western game companies have a terrible track record in Asia. The pattern repeats itself: arrive with high ambitions and big budgets, spend two to three years trying to crack the market, then leave quietly when nothing works. Supercell knew this going in. They talked to everyone who’d failed before them, trying to understand what went wrong. The learning process was humbling.
“The market opportunity was so big that we should try.”
What made their approach different was patience and partnership. The SoftBank deal gave them access to GungHo, the Japanese mobile gaming powerhouse (Note: I learned that Taizo Son, the founder of GungHo, is Masayoshi’s brother… What a family!). They opened local offices, hired local talent, and accepted that overnight success was impossible.
The Stagnation Period
After Brawl Stars launched in 2018, something happened that most companies would never admit publicly: Supercell went stagnant.
“Our live games weren’t growing - they’re basically flatlining. The biggest reason behind that was that we just quite simply weren’t doing enough for our players. Our teams were frankly too small, and they were trying to do too much with too little.”
For six years, no new global releases. Revenue dipped. By 2023, Supercell had dropped out of the top ten mobile game publishers for the first time in a decade.
At the 2023 company offsite, Ilkka opened his presentation with a painful animated slide showing Supercell’s ranking among global publishers. Starting at number one in 2012, then dropping year after year until falling out of the top ten.
“This is gonna be very painful, but I just want to open up everybody’s eyes and get us to the same page where we are.”
A lot of the CEOs would have spun this as “strategic repositioning” or blamed market conditions. Ilkka took responsibility, acknowledged his failures, and brought out a giant bottle of champagne because the failures were so significant.
Two Birds, Two Stones
The solution to stagnation came from recognising a fundamental mistake: applying the same thinking to very different problems.
“Our mistake was that we applied exactly the same thinking to both of these very different problems.”
New game teams needed to operate like startups: small, nimble, with creative freedom to explore. They launched Spark, a 16-week incubator to test new game concepts without long-term commitment.
But existing games needed to operate like scale-ups: bigger teams, more resources, continuous content creation. They started growing live game teams from a dozen people to 60-70 people per title.
The results were immediate. Brawl Stars rebounded with revenue surging eightfold in nine months between June 2023 and February 2024. Massive rebounds in gaming are unusual. This one worked.
The other legacy titles followed. By treating them like living products that needed investment and attention, the approach worked across their portfolio.
Squad Busters: The Latest Champagne Toast
In 2024, Supercell launched Squad Busters (Note: I remember seeing lots of ads in Paris!) - their first new global title in six years. It earned $100 million in its first seven months and helped propel Supercell to a record-breaking year.
Then… they killed it.
Since recording the podcast, Supercell announced they’d stop developing Squad Busters. In true Supercell fashion, it was the Squad Busters team who made the call.
This is the philosophy in action. Squad Busters made $100 million, which would be a massive success at most studios. But it didn’t hit Supercell’s thresholds for long-term potential. Rather than pour resources into a game that wouldn’t become a decade-long hit, they killed it and moved on.
More champagne is in order, I guess?
Lessons That Apply Beyond Gaming
Three conclusions from Supercell’s journey:
First, focus obsessively on what you can control (Note: the stoic in me likes this). You can’t predict market success, but you can control people, teams, and culture. Get those right, and outcomes follow.
Second, create systems that make failure productive. Supercell cancels a significant portion of its projects? Fine, let’s do tons of post-mortems and iterate fast.
Third, independence is earned through results. Supercell maintained autonomy through major ownership changes by proving that its approach delivered results.
In an industry increasingly dominated by live service pivots and quarterly earnings pressure, Supercell’s approach feels like a reminder that patient capital and creative autonomy still produce the best results.
Hope you found this as fascinating as I did.
Until next time,
Rachid