GungHo and Softbank buy 51% stake in Supercell for $1.5bn

GhungHo Entertainment Online and parent company Softbank have purchased a 51 per cent stake in Clash of Clans developer Supercell for $1.5bn.

The deal, reported by TechCrunch, see’s the coming together of two of the industry’s biggest free-to-play developers, and values Supercell at $3 billion.

Softbank founder Masayoshi Son, which purchased increased its stake in GungHo earlier this year to 58.5 per cent, says the telecomms firm put forward 20 per cent ($300 million) of the total amount.

This means that GungHo itself paid $1.2 billion toward the deal.

Supercell is said to make around $2.4 million a day from its two flagship titles Clash of Clans and Hay Day.

GungHo meanwhile, is thought to be generating around $4.9 million a day from mobile hit Puzzle & Dragons, with most of its revenue coming from just Japan.

The two studios had teamed up earlier in the year for a cross-over promotion between Clash of Clans and Puzzle & Dragons. GungHo’s title temporarily featured spceial content related to Clash of Clans, such as a themed dungeon and new monsters which players could fight and collect.

Supercell’s title meanwhile featured cross-promotions for Puzzle & Dragons.

In a blog post, Supercell CEO lkka Paananen said the partnership would accelerate Supercell’s growth toward being a global games company.

You can read the full post below.

Hi Everyone,

I have some very exciting news to share with you today. We have received a strategic investment of $1.5 billion from SoftBank and GungHo. 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.

Let me try to explain why.

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.

At Supercell, one of our greatest aspirations is to become the first truly global games company, one that has a strong foothold in both the West and the East, including Japan, Korea and China. We want to build a company that people all over the globe will look back in 30 years and talk about all the great games that we developed and the impact they had on people’s lives. The same way I personally feel about Nintendo, for example.

This is a lofty goal and getting there takes persistence, passion, and luck – but just as importantly, it takes time, and requires a lot of patience. Even if we have had a pretty good start on our journey, it is still very early days. Creating history takes time.

The strategic investment from SoftBank helps us to accelerate towards our goal in two different ways:

1) SoftBank provides us with a massive selection of strategic resources that will help us deliver our games to hundreds of millions of new consumers all over the globe.

2) SoftBank is all about the long term. In fact, I have never met anyone who thinks as long term as its founder, Masayoshi Son, does. When we first met, he told me he has a 300-year vision, and I thought he was joking until the following day when he ran me through what it actually looks like and it is indeed very real and extremely inspirational. When you meet someone like Masa you realize what it takes to build a global business that will last forever. It further strengthened my belief that, we are just getting started. As a company, we are 3 years old so we’re only 1% done if we plan for the next 300 years.

In his own words, here’s what Masa wanted to tell our players, employees and friends about Supercell and our new partnership:

“In our quest to become the #1 mobile Internet company, we scour the globe in search of interesting opportunities and right now some of the most exciting companies and innovations are coming out of Finland. Supercell is one of those rare and special companies. While your success is impressive, it is your amazing culture and deep passion that truly inspired me. After getting to know Ilkka and some of the team, it became clear to me that you, like us at Softbank, are on a similar long and aspirational journey to shape the future of entertainment for the next hundred years. And, I’m excited to see an independent Supercell continue to rise with great people and great games, delivering happiness to so many people around the world."

This new partnership also takes our collaboration with our good friends at GungHo to the next level. We are super excited to have them participate in this investment by putting in 20% of the total amount. We’ve had a great collaboration between Puzzle & Dragons and Clash of Clans. They’re an amazing bunch of people, and they have a terrific culture. Through them we’ve come to learn that the Japanese and Finnish cultures are pretty similar on many levels. Not only when it comes to taking your shoes off before you enter someone’s home, but also and more importantly, when it comes to partying, if you know what I mean.

It may sound like a detail, but I should also mention that the company that will end up owning 51% of Supercell is incorporated in Finland. This is both exciting and important for me personally. Although our aspirations are global, our roots and future are very much in Finland. Our operations remain in Finland, our management team remains in Finland and in San Francisco, and we continue to pay taxes in Finland. I think more and more people in this country are realizing that there is life after Nokia!

Naturally, this transaction is great for us from an economic perspective. As many of you know, a big part of Supercell’s culture is the idea of “we are all in this together”. In line with this thinking, everyone at the company will participate in the upside and receive a portion of the proceeds from the investment. None of us work here just for of money, but when the company succeeds, everyone should get their fair share of it and this transaction is no exception.

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.

Lastly, I want to thank our players, all the Supercellians, and everyone else whose support has been so valuable in getting us this far. We’ve had an amazing journey together, and it will only get more exciting in the years to come.

Thank you for reading this far. I know this was a lengthy post, but since this is such an important milestone for the company, I wanted to take the time to fully explain our thinking behind it and exactly what it means to all of you.

Now, let’s go make history together! Kippis! Kampai!