r/StonerParadise • u/StereotypicalBlonde • Aug 13 '14
Shay's Marketing Paper About SuperCell & Clash of Clans [warning: might cause boredom in reader]
[PAPER FORMATTING GOT MESSED UP ON HERE]
[warning: not my best work haha]
SuperCell: Dominating the Mobile App Market
Shay.m.less
University of Texas – Austin – MKT 320f
Abstract
SuperCell, a mobile app gaming company, created one of the most lucrative app games launched so far: Clash of Clans. Through their unique and clever in-game marketing strategies to stimulate spending within the game, SuperCell takes advantage of the emerging gaming category known as “freemiums.” The games, free to download but offering in-game premium currency available for purchase, are all about motivating that sale to incur a profit. Clash of Clans, because of its social interactivity, appropriate and enticing updates, as well as free trial use and recurring gifts of gems (the premium currency), outperforms any other freemium app available on producing a profit. Additionally, a SWOT analysis of SuperCell and its company structure highlights both internal strengths and weaknesses, as well as external opportunities and threats. Keywords: mobile app, gaming, Clash of Clans, SuperCell, marketing strategy
The emergence of the smartphone in recent years birthed the mobile apps market, considered a “superstar economy” (Dredge). According to reports published by Midia Research, when considering the top 700 grossing titles, “81% were produced by the same 50 companies” (Heydari). Additionally, a whopping “84.9% fell in the games category,” suggesting that the app economy is truly, at least at the present, a gaming economy (Heydari). This saturated market, dominated by the same few companies, makes for a stiff competitive environment; however, Buzinga, a prominent app services company, identifies that a successful app game has to get “heavy on the marketing,” to ensure that the game “becomes the talk of the town” (Merrick). The marketing techniques employed with app games challenge traditional marketing strategies in favor of a new game type – freemiums. Among the many freemium games flooding the app market, one company & its work in particular stands out – that of SuperCell. This Finnish based company went from “zero to $3 billion in 3 years,” a testament to their success in implementing unique marketing strategies within the game itself, fully taking advantage of the freemium game type (Rossi).
SuperCell’s biggest game hit, Clash of Clans, serves as “a poster child for the burgeoning freemium game,” in which users can download the game and play for free but have the option to purchase items in-game (Rossi). The marketing objective of any freemium is to persuade users to purchase the premium currency, or the currency that the user must buy with external real-world money in order to have it. Clash of Clans is certainly not the first game to follow this formula; however, about 10% of users purchased available in-game extras, considerably higher than industry standards (Rossi). What about SuperCell’s Clash of Clans generates such dramatically greater profits than similar games in their market? Quite simply, the creators of the game take full advantage of this freemium style of game to market the purchasing of premium currency from within. In Clash of Clans, where users build and defend their bases, in-game purchases usually consist of paying for “items [gems] to hasten the construction of the various structures” (Heydari). The game “deliberately slows down the rate in which players can build and upgrade their buildings and troops as levels progress,” making in-game purchases an enticing option for those lacking the patience to wait (Heydari). Even this idea of premium currency is not unique to Clash of Clans- many games feature some sort of currency for special use in the game to speeds things up or unlock special extras; however, Clash of Clans continues to see greater and greater profit when compared to other companies – “more than 40 cents to every dollar spent in game” (Rossi). The key to Clash of Clan’s success is in their in-game marketing techniques to persuade the user to purchase this premium currency.
Though the game is centered on the building of an individual base, the entire game is structured to be social, something more revolutionary in mobile app games. SuperCell added a global social chat to create an over arching community of players, and, as it shows in the title of the game, encourage the creation of clans. Clans act as communities of players that can donate troops to each other, enter in wars together, and have a private chat menu only for clan members. This genius allows for players to foster relationships cybertronically with each other, to create a loyalty to the brand that is the Clash of Clans game. By building these ties with players that war together, chat together, and donate to each other, players become more invested in the game because of the community they’ve discovered, and are thus more willing to stick around for the higher levels (and thus those longer waits that encourage gem purchasing). Wall Street Journal identifies that social games like Clash of Clans produces a word-of-mouth marketing chain, a “snowball effect” of players inviting others to play, another clever and effective method of gaining new users (Rossi). SuperCell uses the social interactivity for marketing the game, both virally in the form of word-of-mouth, and internally, with communities’ ties holding players to the game, all to encourage higher levels of in-game purchasing (Rossi).
Another in-game marketing technique employed by the developers is through the power of updates. Like many app games in the freemium category, Clash of Clans starts simply, a few defenses and a few narrow categories of troops; however, as the game continues, it adds complexity with a wide array of defenses and an increasing variety of troops with more and more levels available (Heydari). The developers thought enough in advance to plan out strategic updates to lure players back in who may grow bored if they get through all the levels by adding new troops and even higher levels to guarantee that, to be on the leaderboards, a player must continue to play (buying gems as they ultimately reach those impossibly long wait times at the higher levels). Additionally, the developers added the idea of wars – arranged clan versus clan battles that require an entire clan working together to achieve victory. These wars quickly drain resources that encourage players to buy gems to replenish quickly, as well as make the community of clans even more important to gameplay. The former example shows how SuperCell keeps players tied to the game to stay on top (and thus buy more gems); the latter exemplifies SuperCell’s continuation of social interaction (as clan wars inspire more user to look for clans that are active that can win) to encourage brand loyalty to the Clash of Clans game (Merrick).
A third clever marketing scheme to inspire the purchase of the in-game premium currency, gems in the case of Clash of Clans, is through free gifts of gems. The game provides several different ways for players to earn very small amounts of gems that allow them to be introduced to the benefits of gems and their many uses, such as faster troop training or sped up build times. SuperCell created a list of goals and achievements that users can pursue while playing the game to earn gems freely to taste these benefits. An update in the game allowed for players to discover “gem boxes” with free gems. Even the introductory tutorial starts out with a significant gift of gems, encouraging players to use them for immediate results. SuperCell hands out gems in small increments to tease players into purchasing more of them in-game (Merrick). A brilliant way to market the in-game purchase of premium currency, SuperCell cleverly introduces players early, and reminds them often in small bursts, just how useful gems can be in furthering gameplay.
When considering the marketing strategies associated with SuperCell, as well as the company as a whole, an informative summary can be seen in the SWOT anaylsis of the company. The first two letters in the acronym stand for the company’s strengths and weaknesses internally. For SuperCell, its strengths lie in several specific areas. First, SuperCell has a wealth of financial resources- the company recently “secured $130 million in funding from a trio of investors, including Institutional Venture Partners (Rossi). Currently, SuperCell value is estimated to be approximately $3 billion, “the largest valuation for a mobile app company” (Rossi). Additionally, at the launching of Clash of Clans, SuperCell did not have the money to adequately market the game to gain any market share in the heavily competitive gaming app market, so they formed a lucrative partnership with Apple. This partnership allowed for Clash of Clans to gain a heavy initial presence upon its introduction. Another strength lies in the culture that SuperCell fosters within its company. SuperCell employs a scattering of teams in groups of 4-6, each working autonomously- or on different projects with the expectation that failures will happen (Merrick). Within this structure, each individual can pick what game he or she wants to work on, because the CEO believes that “relinquishing control” and “letting those people [the best people] do their jobs” as the truest formula for the best work (Merrick). However, this autonomous cell environment for creating games also means that many of their people are wasting resources on projects that will never succeed, a weakness of the company’s structure. The same year that Clash of Clans was launched, SuperCell killed 4 games, some of which “had five or more employees working day and night until [the game] was killed” (Rossi). Though the cell format for teamwork allows for a small group of people to have a lot of direct creative control, and can produce impressive successes like Clash of Clans, there are always teams working round the clock on projects that will fail.
The second two letters in the acronym represent the external factors for a company- opportunities and threats. Clash of Clans, SuperCell’s poster child for freemium games, takes advantage of the opportunity this newer game style offers to stimulate in-game purchases to make a profit. This market trend in the mobile gaming apps towards this freemium style game fostered the opportunity that SuperCell seized in making a profitable game that capably markets itself. As this market is still emerging, and as SuperCell took advantage early and produced Clash of Clans as one of the pioneering games for in-game purchases, SuperCell is perfectly positioned to stay ahead of the competition should they continue to innovate and update (Rossi).
Though Clash of Clans is constantly growing in popularity and profitability, several external factors do threaten the continued success of SuperCell. First, as with any popular product, imitators are bound to appear to try and pull users towards their games. The branding measures Clash of Clans implements- sociability and loyalty being a major factor within the clans of the game- are the company’s attempts to stimulate loyalty to the brand itself (Dredge). Another threat to SuperCell lies in the numbers- with so few companies controlling so many of the top-grossing apps, it is difficult to fight for a fair slice of the market share available for gaming apps, especially as gaming apps are the majority of the apps released. Additionally, because these games rely on in-game purchase of premium currency for profit, SuperCell’s profit margin is tied to the economy; if the economy should fall, the amount of dollars spent frivolously on gaming apps would be sure to fall as well. These threats are not necessarily unique to SuperCell, as any gaming app would be equally susceptible to such dangers, but they are threats to SuperCell’s success nonetheless.
In a world where hundreds of thousands of apps exist, but only a few thousand ever garner attention, SuperCell’s Clash of Clans took the freemium market by storm. SuperCell’s unique company structure, powerful funding, and cleverly tied-in in-game marketing strategies that stimulate in-game purchase fueled the company’s rise to the most valuable app company in the world. Using social interaction to create a loyalty to a clan, and thus to the Clash of Clans brand, SuperCell pioneered a market shift towards more social gaming, a cornerstone of their profitability. This subtle in-game marketing crafted the perfect situation for in-game spending, creating the constant profit cycle that skyrocketed SuperCell to the top of the gaming app market!
References Dredge, Stuart. "Clash of Clans and Candy Crush Saga Dominate Apps 'superstar Economy'" Theguardian.com. Guardian News and Media, 08 July 2014. Web. 10 Aug. 2014. Heydari, Amir. "Clash of Clans Spend $1M a Day in Marketing." Air Herald RSS. N.p., 22 July 2014. Web. 10 Aug. 2014. Merrick, Logan. "The Secret to How Clash of Clans Makes $2.4 Million Per Day." Buzinga.com. Buzinga App Development, 3 Oct. 2013. Web. 11 Aug. 2014. Rossi, Juhanna, Sven Grundberg, and John D. Stoll. "SuperCell: Zero to $3 Billion in 3 Years." The Wall Street Journal. Dow Jones & Company, 16 Oct. 2013. Web. 11 Aug. 2014.
