I’ll never quite grasp the amount of money being made in mobile gaming. Supercell (Clash of Clans) is one of these mobile gaming companies dominating the space, and they just scored an even bigger valuation. Today, Chinese internet giant Tencent expanded their reach to the top of mobile gaming.
The company and its partners bought an 84.3% stake in Supercell for $8.6 billion. That means the makers of Clash of Clans are worth $10.2 billion. Damn, and I thought Microsoft’s purchase of Minecraft for $2.5 billion was huge. Supercell is worth four times as much!
Once the deal is finalized, SoftBank will no longer own a stake in Supercell.
“We have enjoyed an outstanding relationship with Ilkka and the Supercell team, and it has been our privilege to be part of Supercell’s incredible growth story,” said SoftBank CEO Masayoshi Son. The CEO also dived into the decision to divest from Supercell. “Our decision to divest our shares is driven by our continued focus on monetization for the benefit of our shareholders and on capital structure discipline, both key pillars of our Softbank 2.0 strategy.”
Yeah, SoftBank just turned a nice profit. In 2013, they bought 51% of Supercell for $1.5 billion. In 2015, SoftBank increased their stake in the mobile gaming supergiant to 73%. No word on how much that cost, but you’re looking at around $7 billion or so just for their part. So, they probably doubled their investment. Not too shabby.
For Tencent, today’s purchase continues their bid to “building long-term strategic partnerships with leading game companies,” according to their President, Martin Lau. They already own large stakes in many of the largest gaming companies including Riot Games (League of Legends), Activision Blizzard (WoW, Call of Duty) and Epic Games (Unreal Engine).
“We are excited that Supercell is joining our global network of game partners, and will preserve their independence and enhance their advantages, thus bringing even more exciting gaming experiences to players around the world,” said Lau.
As for Supercell? Tencent’s Lau hinted at what it means for them in his statement. The makers of Clash of Clans will continue to operate independently and will remain at their home in Helsinki, Finland.
The deal also opens up China’s huge player base a bit more for Supercell. “Tencent’s platforms reach around a billion users (yes, a billion!). And, they have around 300 million unique users playing games on their platforms. What this means for us is that together with Tencent, we can bring our games to so many more players. Also, their social platforms offer many new possibilities for our games, particularly for social play. All of this is very exciting,” reads Supercell’s blog post.
Props to Supercell. The mobile gaming market is oversaturated, and it’s not a guarantee that any game they launch will be a success. They understand what their fans want and deliver with each new game. Congrats to Supercell for turning their less than 200 strong company into a powerhouse worth $10 billion+.