What is Supercell’s strategy with Boom Beach?

Posted on January 6, 2014 by Eric Benjamin Seufert

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At first blush, Supercell’s latest game, Boom Beach, appears to be a direct clone of its monumental superhit, Clash of Clans. But the subtle differences that exist between the two titles reveal striking truths about Supercell’s grand strategy: rather than manage user acquisition costs by establishing a broad portfolio of diverse games, it will focus on retaining its best, most monetizing users by ushering them into a similar but improved-upon title.

Boom Beach was quietly released to the Canadian App Store in early November. Supercell – famous for eagerly shutting down titles that don’t meet the company’s demanding expectations – hasn’t released a title globally since early August 2012, when Clash of Clans was launched.

If it survives the gauntlet of soft launch, Boom Beach will be Supercell’s fifth globally-available game. Supercell’s first game, Gunshine, a Facebook-based MMO, was shuttered in November 2012 after being live for approximately 18 months; its second game, Pets vs. Orcs, a mobile game structured similarly to Clash of Clans, was removed from the app store in March 2012 after being live for a little more than one month.

Supercell’s more famous titles, Hay Day and Clash of Clans, form the bedrock of the company’s renown and helped propel its valuation into the stratosphere at more than $3BN; mobile analytics company Distimo recently revealed that Clash of Clans produced more revenue than any other game in 2013, globally, on the iOS App Store.

Given Clash of Clans’ strong monetization and likely multi-year – perhaps decade – active lifetime, it stood to reason that Supercell’s next release would serve as a complement to its existing portfolio, not a competitor. Publishing a similar title could potentially cannibalize Clash of Clans’ user base, eating into its revenue stream and jeopardizing its longstanding leadership position on the iOS top grossing chart.

But with Boom Beach, Supercell appears to be doing just that. Many have noted that Boom Beach is essentially a clone of Clash of Clans, which is curious. Why would Supercell want to compete with itself, given that it could potentially cross promote its massive user base into a new game from a different genre and extract revenues on two fronts?

The reason lies in the subtle but fundamental differences between Clash of Clans and Boom Beach. A recent article by GameAnalytics identified these differences:

  • Clash of Clans allows users to purchase an additional “builder”, or unit of construction capacity, from very early on in gameplay. Boom Beach does not offer the opportunity to purchase an additional unit of construction capacity, thereby limiting the rate by which users can progress.
  • In Boom Beach, troops are not consumed during battles if they do not die. In Clash of Clans, all troops sent to battle are consumed.
  • Boom Beach’s game economy is based around 4 soft currencies — Gold, Wood, Stone, and Iron – as well as a status collectible, Crystal. Clash of Clans features only two soft currencies: Coins and Elixir (as well as battle ranking). The doubling of the number of soft currencies adds a significant level of complexity (through harvesting interdependencies) into Boom Beach’s progression mechanic.
  • The harvesting of resources in Boom Beach is automated. In Clash of Clans, resources must be manually harvested.
  • Conquered bases in Boom Beach pay tribute over time until they are re-conquered. This serves as a retention mechanic: players are incentivized to return to the game often to retain their conquered territory.

Since Supercell isn’t forthcoming with its game metrics, the purpose or intended impact of the above changes is purely speculation, but they all appear to be in favor of long-term retention rather than early-stage monetization. To that end, they all represent what can only be presumed to be seen by Supercell as improvements.

These improvements are the crux of Supercell’s release strategy. Clash of Clans’ highly monetizing players are invaluable; given that Clash of Clans grappled with King’s Candy Crush Saga for the #1 Top Grossing rank (iPhone / iOS) for the entirety of 2013 while residing far below it on the Top Downloaded charts, it is safe to assume that Clash of Clans monetizes players at an order of magnitude beyond what Candy Crush Saga does.

The advertising budget spent on acquiring Clash of Clans’ current user base is sunk; if those users leave the Supercell ecosystem, they must be re-acquired. Given that Clash of Clans has spawned an entire cadre of imposter games, the cost of re-acquiring those wayward users has increased over what the company initially paid for them.

With Boom Beach, Supercell is attempting to retain those users by presenting them with a similar yet fundamentally better experience.

These users are worth hundreds of millions of dollars per year to Supercell; Supercell is better off giving them exactly what the company knows they want than rolling the dice by cross promoting them into a different game genre. And assuming Supercell presides over a sophisticated analytics infrastructure, by releasing Boom Beach now – rather than waiting until Clash of Clans begins to decline, which it inevitably will – it can control the timing of cross promotion and optimize its effectiveness (ie. show ads to the Clash of Clans users most likely to churn).

In releasing Boom Beach, a game structurally similar to Clash of Clans, Supercell is recognizing that, at some point, even the most engaged players will leave Clash of Clans. Supercell’s faction of highly-monetizing users is the most valuable of any mobile game on the market; by releasing a similar game with improved-upon mechanics, Supercell ensures that the players that leave Clash of Clans can still remain within its game ecosystem.

To release a new game from a new genre, Supercell would have to be confident that the title would enjoy — relative to the performance of Clash of Clans and taking into consideration the systemic, unremitting increase of mobile marketing costs — some level of increased per-user monetization, broader appeal, or both. Chasing such assumptions is a risk; releasing Boom Beach is not. It’s obvious, then, that Supercell isn’t pursuing a broad portfolio strategy — rather, it is recognizing its existing user base as an eminently and exceptionally valuable asset and is choosing, as a course of corporate strategy, to prioritize the preservation, rather than the enlargement, of its customer base.