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Empires & Puzzles: Disrupting the biggest market with the smallest team

CEO Timo Soininen discusses the importance of mid-development marketing and defying the “so-called industry experts”

Cracking the mobile market is a Herculean task, especially if you are entering one of the most crowded genres. Countless studios attempt to replicate the success of King, Supercell, Rovio et al, but very few come close to achieving this.

There are, of course, exceptions. One such studio that has been making waves is Finnish outfit Small Giant Games, the developer behind the increasingly popular Empires & Puzzles. While seemingly yet another take on the widely used match-three mechanic, the game's focus on RPG systems and Small Giant's determined approach to marketing has seen the title thrive in an extremely hostile market.

When we meet at Casual Connect London, CEO and co-founder Timo Soininen tells us Empire & Puzzles stands at 1.2 million daily active users, three million monthly active users and 15 million downloads - plus it won the Best Breakthrough Hit award at this year's Google I/O. All solid accomplishments, not only for a 14-month-old game but also for such a small team.

timo_smaller

Timo Soininen, Small Giant Games

"When we built Empire and Puzzles back in 2016, we were just a team of 12," Soininen tells us. "It must be some sort of record that such a small team created such a big game like that in 11 months from scratch. We were really driven, and we did a little outsourcing, but it's a really remarkable achievement.

"Since then we are now big, by our standards. 35 people, all in Helsinki with 10 nationalities. There's a mixture of young talent, and then us veterans and dinosaurs."

Soininen also reports Small Giant achieved profitability by November 2017, and has never made a loss on user acquisition. This is in part due to the effort poured into performance marketing, with plans to do $80 million in marketing this year.

The firm's success has attracted the interest of several investors, most recently completing a $41 million round of funding at the beginning of February. Soininen tells us the studio has reached $130 million revenue run rate in just 12 months from launch and still feels "we've only just scratched the surface."

"A large part of that [$41m] investment was actually secondary purchases from all Small Giant team members, so we were able to sell our shares to investors, and part of that money went into our warchest," the CEO explains.

"We were already profitable at the end of last year so we didn't really need that much money. There was a point in time where investors wanted to increase their share, it was good for them and good for us, so we're now able to focus on building on great things for many years to come."

Small Giant Games is determined to keep its headcount low, despite its big ambitions

Small Giant Games is determined to keep its headcount low, despite its big ambitions

So why is it Empires & Puzzles has succeeded where so many others have struggled? Match-three games are hardly rare, nor are titles that mix the mechanic with RPG systems or collectible characters.

Soininen points to a number of fresh twists Small Giant has brought to the genre. Most notably, the need for aiming; in most match-three RPGs, matching coloured gems triggers an attack from the relevant character that deals damage to a selected target or all enemies. In Empires & Puzzles, matching gems actually unleashes miniature troopers from that position, meaning only enemies directly above the match are harmed.

base

Empires & Puzzles' base-building system

The game also boasts a base-building system similar to the likes of Game of War, as well as various modes you'd expect from a strategy game, such as alliances, PvP and this year's Alliance Wars mode. More importantly, the studio has placed a great deal of emphasis on its onboarding process.

"We made the game extremely approachable," Soininen says. "Most of the midcore RPGs are playing the zero sum game on a relatively limited audience - in fact, if you launch a new game you're going to have to steal players from the other games, which is difficult and expensive.

"We wanted to make a game that is so accessible and welcoming. Our tutorial is probably one of the longest tutorials out there, which is very counter-intuitive according to so-called industry experts. But we tested everything vigourously, and it gave us the confidence that this was the right way to do it.

"I think the whole appeal of Empires & Puzzles is it's an intro-level RPG. We've kept the threshold really low, while having the extremely deep meta and lots of gameplay modes if you do want to go deeper into our fantasy world. We've been able to convert a lot of players, existing RPG fans love it - it comes down to the differentiating aspect that is the gameplay."

The longer tutorial alone shows the risks Small Giant has been willing to take to establish Empires & Puzzles as a hit. Given how much titles are vying for people's attention on smart devices, conventional wisdom pushes for developers to bring them into the game as soon as possible. Too much instruction, particularly for systems players have likely encountered in other titles, is likely to encourage deletion within the first few minutes.

"Most of the midcore RPGs are playing the zero sum game on a limited audience - if you launch a new game you have to steal players from the other games, which is difficult and expensive"

"Of course that was a worry, but we tested this so well," Soininen explains. "And I think it's all about storytelling, how we devise the flow and the fact it's all done in sequences. It's not one of those boring tutorials. Of course some people aren't going to like it, but our stickiness ratio has been really good so people must like it.

"You can have all kinds of theories in your head, but you rely on the numbers and testing. Sometimes for different games, different approaches work and it's important that you keep an open mind. As developers, we sometimes have this prefixed idea of what works and what doesn't, but you shouldn't have that. Try different things, especially if the numbers are telling you the prefixed approach is not working.

He continues: "But it's also the combination of being really good at marketing. In today's world, even if you create the best possible game out there, it's not going to fly automatically. That's why you have to get all the bits and pieces right. The good news for us is we've only scratched the surface in terms of market penetration."

Empires & Puzzles has attracted investors and millions of players, but Soininen believes it has only 'scratched the surface'

Empires & Puzzles has attracted investors and millions of players, but Soininen believes it has only 'scratched the surface'

It's a disheartening truth, particularly for smaller studios hoping that creativity and innovation will make up for a lack of marketing budget. Not every mobile start-up can hope to attract investors in the same way Small Giant has, not will they be able to build a 'warchest', as Soininen referred to it, in order to invest in user acquisition profitably.

"As developers, we sometimes have this prefixed idea of what works and what doesn't, but you shouldn't have that. Try different things, especially if the numbers are telling you the prefixed approach is not working"

"Well, we didn't have that marketing budget," Soininen observes. "We were literally in this predicament, we didn't have huge amounts of cash. We pretty much had to know very quickly whether the numbers were correct. If the numbers didn't add up in terms of retention and monetisation, we needed to kill this baby quickly so we still had one more shot. You have to be really on top of the numbers."

Soininen encourages studios to essentially build a model for their marketing and try to find out which tactics and creatives work best. Testing different channels will show the sort of attention you can gain through things like Facebook. This, the CEO warns, does require spending a little money, but building this model is essential.

"You have to know your lifetime value vs acquisition cost: if you put a certain amount into user acquisition, this is the conversion rate, you need to know how quickly can you gain that amount from that cohort of users - there's a lead time, so you have to be patient," he says. "But this is what we did to build the model.

"One of the most difficult areas was getting the creatives right, trying to master the Facebook algorithm and getting the whole system to work in an optimal way - it took us quite a long time before we got to a relatively good level, and that gave us the confidence that we knew we were on the right track. It probably took us six months to get to that level, and by that time the game was pretty much ready."

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Small Giant added aiming to match-three

Preparing the marketing model while the game is still in development is also essential to getting investors on board. When Small Giant raised $6 million in an early funding round, it used metrics and the business model it had prepared to demonstrate how well it could perform with more investment.

"You have to be brutally honest about things, you need to recognise that they need to be mastered," Soininen warns. "You have to paint a clear picture for investors. We said, 'we've got a good game, good metrics, we've scratched the surface here but this is the area we need money or help with'. When you tell that story, it makes you really credible, rather than spending your life trying to bullshit your way through, painting too pretty a picture."

With Empires & Puzzles now established, Small Giant is ramping up work on its second game. While Soininen can't tell us anything about it, he does reveal the project is currently in early consumer testing and may be ready for a soft launch later this year.

However, he stresses that 90 per cent of the studio's efforts are still focused on the roadmap for its flagship game. The recently added Alliance Wars, for example, "saw massive improvements in our KPIs" and the studio is keen to explore this further. Plus, new levels, new heroes and new gameplay modes are all in the works to keep those millions of players engaged as long as possible.

"We basically have a continuous flow of events, activities and quests to keep the game fresh," he says. "There's no reason why this game couldn't have a lifespan of five to eight years."

It feels as though Empires & Puzzles could grow to become one of the bigger brands in mobile games, and this will bring the need for more resources at the studio. Despite this, Soininen is determined to keep the headcount low, staying true to the developers' smaller origins.

"In terms of headcount, we'll probably grow a little bit but the name Small Giant requires us to be small," he says. "It's more about making sure we are very efficient in everything we do. The danger is the more people you start hiring, the more there starts to be this communication overhead, which is not always healthy.

"We're big believers in having really small teams - we have an extremely small team running user acquisition, it's just a fraction of the teams you find at the larger companies."

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