In the list of high-paying corporations in taxes recently released by the Finnish government, one game company made the cut. It is Supercell, which paid about €220 million (about 377.3 billion won) in corporate taxes in a single year and is called Finland's "national game company." The company established itself as a leading developer in the mobile game industry by rolling out global hits in succession such as "Clash of Clans," "Clash Royale" and "Brawl Stars." But recently, among the game industry and users, there has been no shortage of assessments that "this is not the Supercell of old." As a slump in new titles continues and controversy grows over monetization models in existing games, there are claims that the development culture of Supercell—once famous for the philosophy of "we don't release it if it isn't fun"—has changed.
◇ New title failures, monetization controversy… the "Supercell formula" wobbles
According to the game industry on the 18th, Supercell's global new title "Squad Busters," released after five years, is slated to end service in June. When it launched in 2024, it raised expectations as a game that would revive Supercell's heyday, but it failed to become a hit amid continued criticism of monotonous gameplay and shallow content. A global release heading to shutdown in a relatively short period is considered an unusual case even in Supercell's history.
User backlash is continuing in existing popular games as well. In Brawl Stars, user dissatisfaction grew after the introduction of a new upgrade system and changes to the paid item structure, and Clash Royale has also seen steady criticism that "the burden of spending has increased" following the expansion of card levels and the introduction of an evolution system. There have also been a series of cases in which game communities and prominent streamers publicly criticize Supercell's operational direction.
The financial statements show this structure as well. Supercell's revenue last year remained at about 4.5 trillion won, down 4%–5% from the previous year, but operating profit rose about 1.5981 trillion won, up 6% year over year, marking an all-time high. That is because, with new user inflows slowing, it is maintaining profitability by increasing the spending of existing users. While the structure of securing stable revenue centered on existing popular games has been strengthened, among users there has been criticism that this is a "game operation method that serves as a cash withdrawal machine."
There is criticism that Tencent's governance structure lies behind these changes. In 2016, Tencent acquired Supercell equity held by SoftBank through a transaction worth about $8.6 billion, and in 2019, it increased its equity in the investment consortium Halti S.A. to 51.2%, bringing it in as a subsidiary for accounting purposes. The Halti consortium currently holds about 84% of Supercell's equity, giving Tencent de facto control. Some in the industry note that, on the surface, the regime of founder Ilkka Paananen as chief executive officer (CEO) has been maintained and independent management emphasized, but in practice, since joining Tencent, an operation policy focused on profitability has been strengthened.
◇ From equity investments to management involvement… spreading to Korean game companies
This trend is not unfamiliar in Korea's game industry. Tencent is currently a major shareholder in key domestic game companies such as Krafton (around 13%) and Netmarble (around 17%), and it also holds equity in Kakao Games (around 3%). A significant portion of domestic games serviced in the Chinese market are distributed through Tencent publishing.
Recently, SHIFT UP moved to revamp its board by appointing a top executive from China's Tencent as a candidate for other non-executive director. According to the Financial Supervisory Service's electronic disclosure, SHIFT UP plans to address an agenda item at its regular shareholders meeting on the 26th to appoint Ming Liu, global CEO of Tencent Interactive Entertainment, as an other non-executive director.
An other non-executive director is a part-time director excluding outside directors, usually taken by an executive of a major shareholder or a representative of a strategic investor, who advises or oversees the company's management activities. Tencent is currently the No. 2 shareholder with 34.48% equity in SHIFT UP, and the gap with the equity held by CEO Kim Hyeong-tae's side, the largest shareholder, is not large.
A game industry official said, "Tencent's global publishing capabilities are strong, so from the perspective of Korean game companies, there is an aspect where they have no choice but to cooperate," but also noted, "As equity investments and cooperation expand simultaneously, it is necessary to watch over the long term what impact this will have on management decision-making."