SoftBank and GungHo invest in Finnish game maker Supercell to leverage paradigm shift, time shift and market disconnects - Eurotechnology - SoftBank and GungHo invest in Finnish game maker Supercell

Smartphones and the “freemium” business models are bringing a dual paradigm shift to games and create a new truly global market. To take advantage of this global paradigm shift, its necessary to overcome the cultural disconnects between markets. SoftBank and GungHo‘s investment in the Finnish smartphone/tablet game maker Supercell, announced on Oct. 15, will help to overcome the disconnect between Japan’s and other game markets for both Supercell and GungHo.

The disconnect between Japan and other countries is often surprising – when BusinessWeek in 2006 commented on rumors that SoftBank might introduce an Apple “iPod-Phone” to Japan, BusinessWeek remarked that “Apple would normally never talk to a small-fry such as SoftBank” …. at that time SoftBank’s annual revenues were about twice Apple’s, and BusinessWeek printed my correction pointing out that SoftBank even at that time was anything but a “small fry”.

One of SoftBank‘s aspects is it’s “time-shift” investment model, another is SoftBank‘s 30/300 year vision – both are important factors to understand the Supercell investment.

(Please see image above.)

This Figure contrasts the market caps of new mobile and smartphone centric game companies (GungHo, Supercell, DeNA and GREE) with traditional console, video game and arcade game companies.

SoftBank announced that because of the majority investment, Supercell will become a subsidiary of SoftBank, and GungHo will account for Supercell’s profit/loss under the equity method.


GungHo and Supercell both are top-ranking mobile game companies: GungHo inside Japan with “Puzzle and Dragons”, and Supercell outside Japan with “Hay Day” and “Clash of Clans”. Expect both to leverage each other’s resources.

Both GungHo and Supercell show explosive growth:
GungHo’s operating profits increased 4050% (x 40) for Jan-June 2013 compared to the same period one year earlier.
Supercell’s revenues (mainly in-game purchases) jumped 500x from EURO 151,000 in 2011 to EURO 78 million in 2012.

Culture can be an issue between Japan and other countries, however, SoftBank has invested in more than 1000 comparable companies, and many of SoftBank’s investments have been outstandingly successful including Alibaba and Yahoo.

However, investment and management support by SoftBank does not automatically guarantee success in Japan – despite SoftBank’s investment and support, Zynga closed operations in Japan earlier this year. Success in Japan will remain Supercell’s responsibility, despite SoftBank’s and GungHo’s help and investment – as Zynga can tell.

(c) 2013 Copyright by Eurotechnology Japan KK. All Rights Reserved.


Related Articles

REVIEW: Shuttle XPC SZ87R6 & SH87R6 Barebones "Black Boxes" -

Veteran Contributor Ike Leus has returned! Specializing in the techier/geekier side of our coverage, his extensive collection of absurdly popular home server and gaming rig reviews, along with a variety of other tech coverage, can be found here. Welcome back!

Grand Theft Auto V - Touch & Try at Tokyo Game Show 2013

Japan is getting a taste of the phenomenon that is Rockstar Games' Grand Theft Auto V at Tokyo Game Show 2013.

At its own Touch & Try pavilion at the show, Rockstar showed what it's like to navigate Los Santos and Blaine County. The company has built an incredibly detailed and lifelike world, which we are told will take inestimable hours of time sitting on your couch to fully explore and appreciate.

Those at the show are being given a taste and the consensus that we heard matches the enthusiasm that we're reading online.

Reno J. Tibke - September 20, 2014

Japanese Technology from the Future Friday! -

This week it looks like India is going to add Japanese train tech to their cart even though the pirated Chinese knock-offs oooops we mean "models" are cheaper, and here at the Tokyo Game Show, Square Enix has introduced a new company, Shinra Technologies, which they hope will kill all gaming hardware...kinda!

Eurotechnology Japan KK - October 05, 2013

Japan’s top 9 iconic game companies, Nintendo, Sony, Sega-Sammy, Bandai-Namco, Konami, Takara-Tomy, Square-Enix, Capcom, Tecmo-Koei created much of the world’s games markets, and many of the world’s most loved game characters.
They are now seeing brutal disruption.

With the Financial Year ending March 31, 2013, for the first time, just three Japanese newcomers (GREE, DeNA and GungHo) achieved higher operating income than all top 9 Japanese iconic incumbent game makers:

Mesmerizing GIFs Show Nintendo & PlayStation Controller Evolution
Sony may have nailed the utility right off the bat, but Nintendo’s bold choices from the SNES onward have arguably been much more fun and inspiring. Have a look at the GIFs’s hard to look away!
Earphones that comes with Game Boy-like remote-control microphone will be released for ¥2,138 on December 19 by Datel Japan.

Creative Media is going to release the wireless gaming headset system Sound Blaster Recon3D Omega Wireless r2, featuring SBX Pro Studio technology, in late January. It consists of the USB sound adapter Sound Blaster Recon3D, the headset Omega Wireless Headset, and the option for wireless connection through the TacticLink Wireless Card.

Nissan and Polyphony Digital officially unveiled Nissan "Concept 2020 Vision Gran Turismo". It is a virtual sport car made for "Gran Turismo 6" (a game software) for PlayStation3.

Polyphony Digital is a subsidiary of Sony Computer Entertainment and develops video games. They are well known as a developer of the Gran Turismo Series.  

Eurotechnology Japan KK - October 09, 2013

Since last financial year (ended March 31, 2013), three newcomers (GungHo, DeNA, and GREE) combined achieved higher operating income and higher net income than all 9 iconic Japanese game companies (Nintendo + SONY-Games + SegaSammy + BandaiNamco + Konami + TakaraTomy + SquareEnix + Capcom + TecmoKoei) combined.

While the newcomer’s revenues are increasing (except for GREE), the traditional 9 game companies’ revenues peaked in 2008, and have been falling rapidly ever since.

Smash Tokyo!
Bandai Namco
has been developing a GODZILLA game for PS3 and they will release it to the market in winter (late) 2014.

The GODZILLA game is made to celebrate the 60th anniversary of the first GODZILLA movie as well as the release of a new Hollywood version of GODZILLA which will be out on July 25 in Japan.

Final Fantasy Cafe
Square Enix
and Pasela Resorts, which sets up and runs leisure facilities, jointly opened a Final Fantasy XIV concept cafe - Final Fantasy Eorzea Cafe - in Akiharabara, Tokyo yesterday.

The Final Fantasy Eorzea Cafe is a replica of the Carline Canopy tavern in the town of Gridania as it appeared in FFXIV.