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Supercell Acquires Ultimate Studio

WRITTEN BY | 02 Oct 2023
Supercell Acquires Ultimate Studio

This article is based on our Weekly News Digest #39 from 02.10.2023. If you want to receive such analyses first, be sure to subscribe to our weekly newsletter. There, we analyze the largest deals, elaborating on the financials and strategy behind, while also covering the smaller transactions of the week.

Finland-based gaming company Supercell, a subsidiary of China-based gaming and tech giant Tencent (SEHK: 700), acquires a majority stake in Australia-based racing games developer Ultimate Studio. The partnership aims to create new titles and reach a broader global player base, marking it one of the first major steps for Supercell to expand beyond mobile.

Ultimate Studio was founded in 2018 and is primarily known for the arcade-style racing games series Hot Lap League, available on PC via Steam, as well as on AppStore and Google Play. Right off the bat, Supercell supported the company with a Seed investment and 3 following investments. To understand why Supercell went for the acquisition, let’s have a look at the performance of its games and the changes in strategy.

During the last 2 years, Supercell’s games slowly but steadily declined in terms of Revenue. The company currently runs 5 full-fledged games and 1 title in beta. Supercell’s three biggest titles — Clash of ClansClash Royale, and Brawl Stars — continue to show strong financial results, though the Revenue generated by all three games has declined almost twice for the last two years from approximately $110m per month in 2021 to ~$60m per month in 2023 so far, according to AppMagic.

Supercell Appmagic

Source: AppMagic

The current decline phase is highly associated with the strong decline in Brawl Stars Revenue. Apart from the overall market challenges, there are several reasons for this.

In Mar’22, Supercell removed its games from Russian and Belarus app stores, and blocked access at all from these countries one year later, losing a significant part of the market. According to, before all this Russia was top-1 in terms of downloads and top-2 in terms of Revenue. Apart from that, Supercell removed loot boxes from Brawl Stars in Dec’22, once again losing profits from in-game transactions. But this only accompanies the main reason for the decline — the lack of new launches.

Supercell Geo


Before that, the company managed to show tremendous growth within one platform by releasing one hit after another. Looking at the graph above we see that when Clash of Clans starts losing its Revenue, Clash Royale comes in and boosts the company’s performance. Then, the same thing happens with Brawl Stars. Looking at this hat-trick, we should not forget that before that the company was booming with Hay Day. Clearly, such a legacy builds high expectations both among the audience and the peers. As a result, we see Clash Mini staying over 1.5 years in soft launch (learn more on DoF), while Floodrush’s development is being canceled. Speaking of expectation, the reason for that is “the need to uphold the company’s standards of excellence”.

Combine the audience pressure with the tough conditions of the mobile gaming scene, and it gets easier to see the reason for Supercell to expand to other platforms. But this strategy doesn’t come out of the blue with the acquisition of Ultimate Studio. Back in Feb’23, the founder of Supercell Ilkka Paananen, stated that the company might look into the PC & Console gaming market while keeping operating existing mobile titles.

Supercell Univers

Source: Reddit

So what can we expect from Supercell coming to PC?

First, the company has experience working with Unreal Engine — the above-mentioned Clash Mini was built with Epic Games’ tech, unlike other games which are based on Supercell’s proprietary game engine. So Unreal Engine might be the stack for Supercell to use for the expansion. However, Supercell CEO Ilkka Paananen also spoke about the enhancement of the company’s game engine and “maybe even rivaling with third-party engines”.

Second, the company is likely to explore more of a casual side of PC & Console gaming. Ultimate Studio’s racing title Hot Lap League is an arcade game, which focuses more on the fun and chaos, rather than graphics and realism, that are common for simulation racing. This approach is close to that of Supercell, which makes easy-to-learn and hard-to-master games, appealing to a wider audience, but having a depth in gameplay and progression.

Third, the Supercell characters might come to PC & Console in both the same and the new games. Speaking of franchise expansion, the first thing coming to mind is porting Clash Royale or Brawl Stars to other platforms. However, Supercell’s IP has returning characters and its own unique universe, which can be used to expand into various types of new genres.

The acquisition of Ultimate Studio looks like a turning point for Supercell and the first sign of a new era for the company. However, the deep expertise in M&A and vast resources of Tencent might even help Supercell to transform into something entirely new that goes beyond our expectations.