Tencent’s Supercell see sales decline

Tencent

Squeezed by intense competition, Finland’s biggest video game maker Supercell reported a 7% drop in annual sales on Tuesday.

Supercell, majority owned by China’s Tencent Holdings and known for titles such as “Clash of Clans”, said that “Brawl Stars”, published in 2017 and the newest of its existing games, crossed the 1 billion euro mark in gross revenue early this year.

The company said overall user numbers rose year on year but increased marketing costs and the way Supercell books sales and expenses separately meant the benefit was not reflected in the annual financial statement.

The company did not disclose the extent of its marketing spending.

Global video game revenue is estimated to have surged 20% to $179.7 billion in 2020, according here to IDC data, making the sector a bigger moneymaker than the global movie industry.

Supercell and rival mobile game maker Rovio, of “Angry Birds” fame, have struggled to generate revenue growth in the face of increasing competition from console games.

Supercell’s games are free to download and the company makes its money from in-game purchases

Last year’s annual revenue fell to 1.3 billion euros, down from almost 1.4 billion euros the previous year, while earnings before interest, taxation, depreciation and amortisation (EBITDA) dropped 21% to 407 million euros.

In the past two years Supercell has released and discontinued two games and now has five actively supported games.

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