Finnish Gaming Giant Records Falling 2018 Profits

When it comes to the mobile gaming industry, upheavals and changes are quicker than many other industries. A company can produce a string of hit games, but when new games are not coming up, then it can find itself in trouble. That is exactly what seems to have happened with Finnish mobile game developer Supercell as its hit games are now growing old and consequently, the company has recorded a sharp fall in profits for the year 2018.

The mobile game developer recorded a drop in profits to the tune of a whopping 26% in 2018 and according to reports; some of the company’s biggest revenue earning games have fared badly. Clash Royale and Clash of Clans, which have historically generated revenues, have not performed well and much of it has to do with the fact that both games are relatively old.

The Finnish company was founded in 2010 and 2012; it launched Clash of Clans, which quickly went on to become one of the world’s most popular mobile games. As of 2018, it was the world’s fourth biggest game. Tencent Holdings Limited of China holds the controlling stake in the Finnish company, and according to the latest figures, earnings plunged to 529 million Euros as opposed to 729 million Euros in 2018.

In addition to that, revenue fell from 1.8 billion Euros to 1.37 billion Euros, which reflects a drop of 24%. It is a sobering time for the company, which was valued at $10 billion as recently as 2016 and grew exponentially on the merits of its existing games. However, it is now abundantly clear that Supercell now needs to create new games that will find as big a customer base as its early successes. The company has only produced five games so far, and the latest one was Brawl Stars, that was launched in December of 2018. Although the game did manage to become the top game in Korea and Japan, it did not meet the targets that the company had set. That being said, these are still early days, and the game could find traction in the near term.

Ikka Paanenen, the chief executive of Supercell, did not go into a breakdown of sales figures for its four games but he did point out that Clash Royale and Clash of Clans recorded the biggest drops in revenues. It remains to be seen what the company does to stage a turnaround this year.

Copyright © 2019. FinanceOrange. All Rights Reserved.