I'm not sure if this is more of a testament to their corporate strategy or the effectiveness of the freemium model for mobile games.
It's amazing how difficult it is to sell an iOS game for anything more than $1.99. But, if you give them the game for free and let them exchange real money for strategic advantages in-game, they'll fork over a small fortune. Supercell is essentially selling $2.5 million/day in "gems" for only 2 games, gems that people then trade for resources or the ability to do things faster (like building units or structures).
A user named 'Panda' on the Supercell forums claims to have spent over $6,000 on gems in Clash of Clans[1]. Based on the responses regarding how quickly he was able to reach the top of the rankings, it seems to be true. Many other players in the thread report having spent $20-$40 on gems.
Supercell is one of hundreds of developers on the App Store trying to make freemium mobile games.
They're doing well because they picked a winning business model for their games and then they went on to make great games. Clash of Clans was a breath of fresh air in an environment with tons of clones and uninspired crap. Also, entertainment is a hits driven business where if a product starts winning, it tends to dominate.
Picking a business model is crucial, but not sufficient, to be successful.
I'm willing to give them some credit for corporate strategy. Keep in mind Zynga is in the same business as they are and they are failing hard. Player count is dropping like a stone and layoffs abound.
The fact that Supercell has been able to succeed with the freemium model while many other mobile developers (both big and small) cannot, speaks to something unique about them.
And then their profits dropped 95% year-over-year... But that's the nature of mobile gamers and mobile games. The players are extremely fickle, and the games lack the depth and complexity necessary to keep people engaged over long periods of time. People flock from one fad to the next.
So far, I don't think we've seen anything but a bunch of one hit wonders in the mobile gaming industry. Draw Something, Words with Friends, Fruit Ninja, etc. Maybe Supercell will be different, but it doesn't seem likely.
A game that lets you top the leaderboards by paying buckets of cash is a game designed around exploiting their players. It's a kind of shallow and unethical game design that's basically the junk food and cigarettes of games. It's fine that it exists, and everyone should have the freedom to partake in it, but I hope no one looks up to it as a model of good game design. Sure, it's a good business model or whatever, but so is selling cigarettes.
While O haven't played their games in particular, it is my experience that this business model (while apparently very profitable) produces horrible games.
The games will try hard to create an addiction, so the player keeps on playing, while making the actual gameplay as boring as possible to make the players buy gems/berries/coins to bypass the actual gameplay.
I have played some games like this, and I noticed how i would keep on playing the same boring parts (with some fun threwn in occasionally to keep m interest up) over and over in the hope of finally getting to the fun part. But it never came. It made me feel exploited and violated.
For those that don't know, SuperCell makes the top grossing iOS game called 'Clash of Clans'. It is like Farmville meets Warcraft II. Rather the just growing crops to make your farm better, you grow armies to trash other people's towns.
Also to put things in perspective, SuperCell makes 10x more money per employee than Goldman Sachs.
>Also to put things in perspective, SuperCell makes 10x more money per employee than Goldman Sachs.
I'm not sure that the two are comparable, it might be akin to comparing the metabolic efficiency of yeast vs. an elephant. Could SuperCell scale to make ~$50 billion a year?
Not to mention that games are very short-lived and there's an element to luck. What happens if they don't manage to regularly write another winner? Goldman Sachs will be there as long as corporations need financial services.
How long before we see a bunch of startups or consultants trying to cargo cult their success by simply organizing into teams and wondering why it didn't work. There's more to this company than simply "we have small cells that are independent" there was a lot of thought as to who owns what and how they own it.
You're probably right, but FWIW, there actually exists some somewhat scholarly work on this topic. Stephen Haeckel[1] - formerly at IBM Research - wrote a lot about something he called the "Adaptive Enterprise"[2] and suggested something along the lines of more autonomous operating units, bound together using a "commitment management protocol".[3]
And while I haven't explored this in any real depth (yet), my guess is that some of the research into Multi-Agent Systems[4] and Agent-Based Modeling[5] may prove relevant to this aspect of organizational design as well.
I don't know if any firms specifically identify themselves as being "Adaptive Enterprises" or not, but I think there are examples of some companies which appear to use at least some of the ideas. The firm mentioned in TFA may well be one. W.L. Gore[1] and Valve[2] are other firms that come to mind that, while they don't use the term, appear to have structures which bear at least some similarity to what Haeckel describes.
Back in 1999 when Haecke wrote "The Adaptive Enterprise" he said there were no full-fledged examples of a firm which was totally based on the idea. Whether or not there are any today, I can't say for sure.
What I will say, is that I think there is a lot of reason to think that this approach might be a good idea, and to think that it's still an emerging trend.
Definitely, the article is conflating micro-managing and power. I'm sure there are ways Ilkka profoundly shapes the company and that kind of CEO influence is likely why he is able to delegate effectively.
I wouldn't describe it as a "shit" game as the production values and craftsmanship are quite high. On the other hand, it is clearly exploiting a bug in my wiring.
I've spent over $400 on Clash of Clans. I can afford to, but I don't feel that it's a good use of my money. This game design is definitely on the intrusive / addictive end of the spectrum. The obviously wouldn't be making so much money if it were a flat-rate game like Minecraft.
I guess we've known for a while (at least since EverQuest or World of Warcraft at the very latest) that when you combine "polish" with content designed to scratch some addiction-seeking itch in our brains, bad things can happen. At least with those you know the flat rate you're going to be paying over the course of the coming year? I'm sure there's an argument that can be made about you getting "your money's worth" for that $400 of entertainment... but jeez... $400? That's an awful lot of money for a video game. If you knew back when you first installed the game that you'd end up spending so much money on it again, do you think you'd still go ahead and install it?
I've spent thousands of dollars on Magic: the Gathering cards and stuff (across 15 years).
I think it's way more than I should have, and I'll never get it back. It does have the addicting part (packs and drafts are addictive as hell), and a "collectible" part for rationalization.
I have some kind of personal problem that leads me into these time sinks, because I've mostly quit, only to replace it with other time wasters (League of Legends and others).
> I have some kind of personal problem that leads me into these time sinks
Your personal problem is that you're a higher animal. Out of the reinforcement schedule patterns that maximise conditioning, the "Variable Interval Reinforcement Ratio" or VIRR is the most powerful.
That is: systems with random payoff schedules are the most addictive to higher animals. Pigeons, rats, humans: if good stuff happens at random we quickly become shackled to whatever it was we were doing.
Gambling: random payoffs. Addictive.
Buying MtG booster packs: random payoffs. Addictive.
Many, many computer games: random payoffs. Addictive.
> If you knew back when you first installed the game that you'd end up spending so much money on it again, do you think you'd still go ahead and install it?
No. I expected to spend about $20. I'd have bought a drill-press or cheap logic analyzer instead.
Ha, that's a great answer. I want to be clear I wasn't intending to be critical or chiding you with my "jeez $400 is a lot of money!" comment. I'm not sure if it came off that way or not.
I've got my own mobile gaming addiction -- I'm just fortunate that the game I'm addicted to (Civilization Revolution) didn't have microtransactions for a long time, and what they've added recently, I've been able to avoid.
I tend to get to a point that I just delete the game. I used to play Tiny Towers and did some small in-app purchases but nothing big.
The biggest issue I have with these games is that they can be great time wasters.
At some point, I just deleted the game as I realized my addictive side was taking over.
It would be great to have an app that you can selectively pick apps that you want auto-deleted after a certain time depending on how much time you have spent in the app.
Would a less exploitative model for freemium games be to allow in-app purchases up to a pre-set maximum? I.e. you can play this game for free, and also be assured that you'll never spend more than $80 on it.
I think this would definitely help in some situations. I don't think it would make sense to set up a hard limit though.
Imagine that once the user starts the game for the first time, they are asked if the app should track how much they spent on in-app purchases and let them know if they are at that limit.
If they are about to make another purchase and it will go over the limit, the user is shown a message with the total amount spent so far and that this purchase will push them over the limit.
This would stop the "trigger finger" effect. It would cause the person to break from the heat of the moment with the game and instead of making the question one of - "I want to buy this so I can get ahead in the game.", it becomes - "I already spent X amount on this game, do I want to spend another xx amount.".
I think if someone has a lack of self control, there isn't too much that can be done from blowing a lot of money in this in-app purchases. But I do believe that for the average person, having that second level of intervention (ie. the message with how much they have spent) provides enough pause to really decide if they want to make the purchase.
Does this make good business sense to add this feature? As a game developer, likely not. I don't know how this would benefit a game developer aside from "doing the right thing".
As a game developer, I would welcome industry standards that force games to have labels indicating the maximum amount of money a player can spend in the game.
Saying a game is "free" and then charging for in-game goods is disingenuous. Saying it's $1.99 and then having $100s of shit to buy inside the game is also disingenuous. It should say the game is "free" with "no limit".
If you have a free game with a single expansion pack, then it should say "free", "up to $5" for the expansion pack.
This kind of information is magnitudes more important than the stupid ESRB ratings we have for console titles.
I would personally try many more games if they had these labels. I would also be more comfortable developing "real", one-time fee games, if the competitive landscape were straightened out like this. As it stands, freemium games make boatloads of money and the industry will continue to shift in that direction until something is done about it. The only thing I can think of is to make the consumer more aware in advance.
I suspect we're exploring well-trodden ground here, but perhaps one-time unlockables would be better than consumables because there's a natural limit (you can't unlock the same thing twice). IIRC AoEO mostly worked this way.
That's no reason they couldn't be an interesting case study, though. I mean, these days everybody in the gaming business is chasing those same suckers, from EA on down. So what these people are doing that makes them so successful at catching them is an interesting question.
Interesting that the author uses the US as a comparison....especially when over the past ~30 years, the power of the executive branch has expanded significantly. At the same time, the US's global influence has been waning...
Thought the same thing - that the US is falling apart due to structural failings in its construction. Not sure the analogy of president is right though. The presidency may have strengthened its role in some ways but it is still hamstrung by congress and as a whole US government has got less powerful in recent decades not more, but to the gain of corporations and a small wealth elected not the people as a whole. Precisely because no branch of government is particularly powerful it has no effective remedy once corporations and individuals gain sufficient wealth and influence that they are able to demonstrate regulatory capture and wield power against any individual branch which causes problems to their interests.
>As its name implies, Supercell is organized as a collection of small, independent teams called cells tasked with developing new games or building new deep features for existing games. Cells are given complete autonomy in terms of how they organize themselves, prioritize ideas, distribute work and determine what they ultimately produce.
Correct me if I am wrong, but this is effectively how Valve organizes itself right? :)
Valve doesn't have a CEO. It's an undifferentiated mass of people, at least as far as power structure goes -- sort of like a slime mold. I think that's a lot different than having a CEO who prides himself on being an inspirer instead of a controller (if I'm reading the article correctly). In other words, it sounds like he is a constitutional monarch. (Of course, that bursts the whole "American miracle" thing about him being like the president.)
However, is there an underlying truth at Valve, that if he wanted to, Newell could fire everyone on the spot? I have no idea if that is true, and if so, don't necessary think such an arrangement is bad. But if that is the case, it needs to be acknowledged that authority, even if unstated and unexercised, still has an effect.
The "American miracle" thing bursts if one spends more than a few afternoons noting that the combination of lax IP laws and WW I and II were a great deal more influential than structural detail.
Good games and low cost operations ALWAYS make money.
Just hire developers,graphics artist and/or sound guys.
No suits, no hr, no nothing else other then content creators.
If you _HAVE_ to hire non content creators, make it count.
Actually the company is registered in Finland where everyone's tax records are public, but you need to wait for the next tax year.
I guess that like usually in Finland, salaries are rather modest compared to Bay / US in general (around 40-100k eur), but because of the functioning society, many things are free and taken care of (education, healthcare, daycare), your standard of living can end up higher.
Equity/stock options for employees are almost unheard of and I wish more startups would pick it up. Supercell is also an exception in this regard, that they now offer stock options for everyone (they started it after the last 100M round).
> but because of the functioning society, many things are free and taken care of (education, healthcare, daycare), your standard of living can end up higher.
If it works anything like in Sweden (i suspect it does), the employer pays a high tax too. The employer pays about twice of what ends up in the pocket of the employee.
I have noticed that in big businesses (at least the many that I have been associated with) management sees agile methodologies as a "gimmick" used to keep the masses happy. Rarely have I seen it work from the bottom up (or top down, however you'd like to look at it). Although the article didn't specifically call what they are doing "agile" it seems like the spirit of the methodology. It's really nice to see a company that embraces that sort of working methodology and uses it to be successful. I would be interested to see if they find their environment to be less stressful as well. I wonder what it would be like if every company trusted their employees to do what was best for their company and then empowered them to actually fulfil their vision.
I'm really interested in how organizations are organized. Does anyone have any suggested reading material for things like this? I've only ever heard the term "cells" before as it relates to terrorist groups, but I'm not sure if this is a similar concept. But I often wonder if organizing a business more like a democracy would yield better results in the long run ...
Isn't "a game company that empowers its employees" the same story as Gabe Newell and Valve? It's cool that there's another company doing it but that management style has plenty of previous examples, some basic research would've made for a better article.
I think their secret sauce, aside from obviously being attentative to customers, is to have small teams, 6-7 is considere ideal team for development of games and I would project that to pretty much anything. Just enough talented people to get the job done and nobody to interfere.
Definitely an interesting story, but I hate the "$2.5 Mil per Day" framing of the headline. This isn't anything noteworthy-- lots of companies have annual revenues of over $900 million.
They don't want to report daily revenue because it would average out to a lot less than $900 million a year, I think. Two weeks ago they were making over 1 million a day, now it's over 2 million a day.[1] To me, that growth rate at this kind of scale is more meaningful than a yearly figure (or a daily figure, to be honest).
Of course, the reason they use "2.5 million per day" is to give you a classic Scrooge McDuck kind of visual, with a big semi trailer packed with money entering your palace every day.
When I saw the title I assumed it was Valve. Interesting that it's also a gaming company. There must be something about this kind of corporate structure and gaming that go really well together.
It's more about the freedom necessary to make good art. Movies are done in a very similar fashion. No director runs around telling grips how to tape things or how to run wires. Doesn't happen. Micromanaging kills (or slows) creative processes.
It's amazing how difficult it is to sell an iOS game for anything more than $1.99. But, if you give them the game for free and let them exchange real money for strategic advantages in-game, they'll fork over a small fortune. Supercell is essentially selling $2.5 million/day in "gems" for only 2 games, gems that people then trade for resources or the ability to do things faster (like building units or structures).
A user named 'Panda' on the Supercell forums claims to have spent over $6,000 on gems in Clash of Clans[1]. Based on the responses regarding how quickly he was able to reach the top of the rankings, it seems to be true. Many other players in the thread report having spent $20-$40 on gems.
[1] http://forum.supercell.net/showthread.php/827-How-much-money...