After Zynga deal, Empires & Puzzles maker is an inspiration for Finnish game industry

Finland has more to contribute to the world of mobile gaming than Clash Royale and Angry Birds. We saw that last year when Zynga acquired Small Giant Games for at least $560 million (price tag for 80%).

I met Timo Soininen, CEO of Helsinki-based Small Giant Games, last week at the Slush tech event, which drew at least 25,000 people to Helsinki. He started the company in 2013 and had barely a dozen people to work on the first version of Empires & Puzzles, which debuted in the spring of 2017. The game grew so quickly that Zynga was lucky to snag Small Giant Games on its way up.

In our interview, Soininen said the company has grown to 60 people and is working on new games beyond its huge hit. Empires & Puzzles came about four years into Small Giant’s history, and it was its third title. Soininen said the team stepped back and analyzed the top 50 mobile games. They looked at all of the elements that made them successful, and carved these out almost like Lego pieces. They wanted to focus on a “midcore” game, or one with deeper depth and interaction that was easy to get into.

They wanted to make an “advanced casual game that was more like a hobby than a game,” Soininen said. “What if you used match-3 mechanics to target army shields and use it to bridge casual and hardcore games?”

And the rest was history. When Zynga acquired the company, it paid about $11.9 million per employee. In its last earnings call, Zynga said it was paying out bonuses to Small Giant Games because the game has become like a hobby for its fans. Finland has more than 220 game companies, but Small Giant Games is a rarity that many of its peers admire.

Here’s an edited transcript of our interview.

Above: Timo Soininen, CEO of Small Giant Games.

Image Credit: Dean Takahashi

GamesBeat: How long were you out there before you were bought?

Timo Soininen: Let me count. It was just over four years. Four and a half years. In mid-2013 we started up. It was pretty quick, after all that. After our first two games — Oddwings Escape was a beautiful, beautiful flying game, but we knew at the time that it wasn’t the one. It had some flaws, some issues from a design perspective. We killed that very quickly. In hindsight that was the right thing to do, rather than get stuck on something that might not fly. We really started searching for the big one.

Kudos to the team — we took a deep dive with a small team, only 12 people, and really analyzed the top 50 games inside out. We formed a view of what mechanics work, what games perform well, what games don’t, and why. We had these virtual Lego bricks on the table at the end – these are the components of a good game.

We had this insight, that a lot of what we label as “advanced casual” players, they’d like to go a bit deeper into hobby-like experiences. The mid-core games at the time were almost all very difficult for normal people. The onboarding was crap, from our perspective. We said, “Hang on a minute, could we make something that was easy and welcoming, but still have depth and complexity like these deeper games?”

One of our insights — we had a lot of game jam sessions inside the team, and one developer came up with an interesting idea. What if you used a match-three mechanic where instead of bubbles or candy, you used these shields to target something as an attack mechanic? Then build a game around that. That’s how it got started. This could be the game that bridges these two worlds. We started work, and it’s quite amazing where we went. It was obviously the result of great timing, but also hard work and good insights.

GamesBeat: It must be interesting to get here from the days when everyone wanted to learn from Supercell. Now everyone wants to learn from you.

Soininen: The other thing that was crucial — obviously at the heart of everything is a game that works well, that has good retention, and then eventually monetization that players like. A lot of game companies still fail in a couple of other areas. They think that the business of games is just making a good game. That’s the foundation. Obviously you need that. But we were brutally aware of how difficult it is to get users. We knew we needed to find a way to master user acquisition as well.

When we got our first investment, just before we launched the game, from EQT Ventures, we were probably an unusual bunch of folks. Typically when you go to VCs you paint this pretty picture. Everything is perfect. Just put in the money and everything’s going to be fine. We said, “Look. We know we have a good game with great potential, but there are a couple of things we’re not very good at yet. We need to learn performance marketing. We need your help for that, and we need money. Also, we have an idea of how to build live operations, but that’s not our strong suit yet. We’ll fix it.” They were crazy or lucky enough to believe in us.

Two months after the investment, we were in a really good capacity. We built our own analytics systems at the same time we were building the game. At the time we were 16 people. A lot of us were clearly crazy. You have such a tiny team and you’re building your analytics stack. But it turned out that was a smart move, because it allowed us to go incredibly fast. We were not a victim of someone else’s road map on analytics. On a daily basis we had a new version. Two months after the initial investment we had our first million-dollar month. We had a financial model.

Of course, to be able to then have a business model — we were able to run the game as a business with a very small team. We were covering all the major aspects of a game business. We were thinking about it quite holistically.

Above: Timo Soininen (left) of Small Giant Games and Dean Takahashi of GamesBeat at Casual Connect Europe. He wasn’t as famous then.

Image Credit: VentureBeat

GamesBeat: Does some of this come from having people who’ve done it so many times?

Soininen: Certainly. A lot of us are veterans, industry dinosaurs if you like. That was the learning. You have to replace luck with something you can control. We were lucky enough to have a versatile team – client development, game design, audiovisual design, all that stuff, but also mathematicians who were able to handle the models required for user acquisition. Half coders and half data scientists. And then this incredible capability to do build some of the tools for the business, not just the features of the game.

It’s a testament to the fact that — the team doesn’t have to be super old or experienced. For example, the guy who came up with this original mechanic, he joined as a trainee, a very young guy. He very quickly became one of the key members of the team. It’s a combination of old and new.

GamesBeat: The Zynga combination, what was that experience like? How did you decide you wanted to be acquired?

Soininen: Right after we launched the game, we had our first whispers from some of the big companies. That was back in 2017. We considered that for a while. We sold a small portion of the company to our VCs, and then we continued to work on the game super quickly. By the middle of 2018, almost all of the heavyweights of the industry started approaching us. At some point it was clear that the scope of the deals became so meaningful that we started to consider it. We hired a banker to help us figure things out.

We still weren’t sure we wanted to sell. We’d only just gotten started. But it became very clear that there’s a lot of value to be created, and more important — could we find a partner that shared the same vision we had, and who would allow us to maintain this unique culture and efficiency and way of working we have? Really see how deep the rabbit hole goes with this game and future games.

During that process it became clear that Zynga was one of the most, if not the most, data-oriented companies. They understood the mathematics and the structure of the game very well. But more important, Zynga was in a situation — they were in this fix-it mode, and they needed good companies to join them and start helping them grow again. They wanted us to join that journey and be part of it, a big contributor. That resonated with us.

Subsequently we took a lot of the consideration in Zynga stock, which turned out to be a good decision.

Above: Small Giant Games

Image Credit: Small Giant

GamesBeat: I remember from their earnings call, they said they structured the deal with a lot of bonuses for you. That’s starting to pay off.

Soininen: Exactly. We continue to be entrepreneurs. Zynga’s bought 80 percent of the company, and they’ll buy the remaining 20 percent over the next three years based on EBITDA multiples. It aligns our interests perfectly.

We like Frank’s vision, that Zynga could be one of the top three, top four companies in the world eventually. If we get good new companies involved and the internal studios continue to do good work, if we continuously improve — that was interesting. For me personally that resonated well. It’s cool to be part of a company with a mission. They’re also super nice people. We get along quite well, as opposed to some of the other Asian, European, and U.S.-based companies, really professional companies that are already very large. Even if we perform super well, we’ll still be a small part of the business at a company like that. We’re not going to make a big difference. The chance to be a big contributor to the success of the new mothership was motivating for us.

GamesBeat: Letting you run your own operation, I’m sure that’s important. What are some of those details like? I would think that you’d welcome recommendations going in both directions. But you don’t necessarily want interference.

Soininen: Obviously there are a lot of resources and lot of brainpower available in the group. We’ve tapped into the data analytics resources at the mothership, whenever we need them. There are really smart people available for us. We’ve done some work on optimizing other areas, pooling the resources of the company and negotiating certain types of deals. That happens quite frequently.

And of course getting feedback on — let’s say a game designer wants to have a second opinion. There’s always someone to call now, their counterparts. “What do you think about this?” Especially with Gram Games, a similar studio to us. We have a lot in common. We exchange notes and meet pretty regularly. That makes a lot of sense.

Using Frank’s words, nobody coerces or forces cooperation. It comes naturally. We have this smorgasbord of services available to tap into. If we had some really troublesome times, of course people would step in and try to solve our problems, but so far things have gone very well. We’ve been able to control our own destiny within Zynga.

Above: A hunter’s lodge in Empires & Puzzles.

Image Credit: Zynga

GamesBeat: It’s pretty rare for that to happen.

Soininen: It is. A lot of people ask me about that, people who haven’t seen me in a while. Frank, Bernard, Matt, they obviously all have had long careers with Electronic Arts and other companies. They’ve seen what happens when you try to force something. The new model is that you have these semi-independent studios that are consolidated and they exchange.

Creativity flourishes in smaller units. That’s a fact of life. If you’re able to create this ecosystem that allows that to happen, and you focus on results rather than how things are done — of course we’re part of a publicly listed company, so there are certain things we need to comply with. But it’s been a very positive surprise to us, how lightweight it’s been. Maybe it’s that we were already automatically compliant in many ways. But it’s been no burden for us.

GamesBeat: I talked to the folks at Riot Games recently, where they had this interesting situation of running one of the hottest games in the world for 10 years, and then all of a sudden they announced eight more. They were always working very hard on other projects, but there were these difficult tradeoffs as far as how much to feed into the existing game to keep it going versus pulling people off to do other things. For you, do you have any similar feelings about what you need to do going forward?

Soininen: That’s a debate for any company that has a big, successful game. What next? If you look at the lifespan of these kinds of live-ops games — Clash of Clans has been going seven or eight years now, and my guess is that this will be the best year ever for that game. We’re only two and a half years old, still a baby in the market. We think we have a very long life ahead of us.

The vast majority of our efforts go into building Empires and Puzzles. We have season three coming up next year. We’re launching our version of Battle Pass, the Path of Valor. We’re making sure this game has content and continuity, so players can play it for months and years. That’s the number one priority. It’s a very large, active community.

We have another game currently in soft launch called Puzzle Combat. It’s a variation, a similar-ish game. It’s not the same. We’re testing that and trying to get it to feel right for the players and from a numbers perspective. We definitely want to create a series of games over the years. As far as the sequence and how rapidly we’ll go, that’s difficult to say. It’s painful, because if you have a successful game, you should always take some of that and put that into something new, in an ideal case. But taking some of the best people, who’ve poured their souls into the game, away from the project, sometimes that’s difficult.

Above: Empires & Puzzles

Image Credit: Zynga

GamesBeat: Does that sometimes become a reason to seek help from your parent company? The thing I think of is Activision, with multiple studios working on Call of Duty, because it’s the brand that drives them forward.

Soininen: That’s the idea going forward. In the short term, if you have studio X and studio Y and they have very different operating cultures and development models, sometimes it’s very difficult to teach the old dog the ways of the new dog, if you like. That’s something to consider. Sometimes it’s actually easier to grow organically. For example, in our case, we’re still very small. We have about 60 people at the moment. Hiring people to work with the original team, you transfer that culture to the new people, rather than giving something away for a third party. I think that will eventually happen at some point as well, but it’s probably more efficient and more fruitful to try to keep the DNA and pass on that information.

GamesBeat: You have to figure out how many people the old game needs and how many the new game needs.

Soininen: Exactly. What’s been quite unusual in our approach, we don’t have a live ops team per se. Our development team is developing new features and live events, but also running a lot of those events. There’s a lot of automation. It’s very compact. The fact that we’ve always had a very small number of people, that’s been by choice. We’re trying to duplicate that approach.

The primary motivation for us has always been — it’s really motivating for the team itself to be running the whole show. Given the tools that we have available now from a technology perspective, you can automate so much. You don’t have to necessarily do that much manual work. Talking to our developers, they have a very strong sense of ownership. They’re running the game, not just developing it. We talk to some other companies who are very successful doing this with teams that are 10 times bigger. Both can be happy, but for us, for our purposes — we’ve been able to recruit really good people because of that. They feel that this is something interesting to take on.

It’s easier to do something new at a smaller company, though. You have this close proximity. You’re not being transferred somewhere. Maybe you’re changing to the desk next door and working with some new people. Scaling with that model has its challenges as well. It’s not always that easy. But we have an honest approach to these things. We discuss with the teams. How should we go about this? It’s not a model where we have one mastermind thinking about all of this. It’s always a joint effort. It works when you have the right kind of people who are ready for that. The young talent we’ve acquired, it’s incredible how quickly they’ve been able to contribute. They’re jumping in the deep end of the pool and learning to swim. We have our mentors as the lifeguards, making sure they stay afloat.

GamesBeat: Do you have some advice for people who would want to learn from you?

Soininen: The one thing when you’re developing a new game — with this game we were very clear about the niche, the positioning of the game. We had a relatively clear picture, a hypothesis. What if we create this? We’re targeting as a team to get there. That’s one thing. You should try to be very clear about what you want to achieve. Sometimes that’s not there. That was not the case with our first two games. We learned about that the hard way. The second thing is to focus on essentials. Learn to say no to a thousand things. It’s tempting to go all different ways. You have to keep that purpose in mind. What is it that we absolutely need to have to get there?

Make sure you understand what works and doesn’t work in the market. Reinventing the wheel is not a noble cause, in my opinion. It’s just reapplying what works and making a new mashup of existing, working tools. Sometimes your creative input is that you just make a new mashup. You make the flow a little bit different. That’s important. If you have a very good idea, I have a lot of respect for that, but chances are that you’re not going to make it. It’s too much for consumers to go for. A path of less resistance, I feel like, is a good choice.

Think about the game as a business. Think about every area, not just the development and server-side technology. Think about analytics. You have to be good at analytics. You have to understand performance marketing, most likely. You need to be good at live ops. You need to be able to do community operations and customer support. You need someone to model the business. Once you tick all of those boxes, then you have a good chance of getting your game off the ground and staying there.

Above: Empires & Puzzles has match-3 gameplay.

Image Credit: Small Giant Games

GamesBeat: It some ways it sounds like there should be a lot of conflict in all of that. I look at Blizzard and what happened to them when they announced Diablo Immortal. Normally you announce a game that looks like that and people are happy, but Blizzard’s fans were all upset, because they wanted a PC game. Certain developers might agree to just do that, to make the game the fans want to play. Some companies might have a lot of conflict over this. But I sense that you don’t.

Soininen: If you understand what you do and who your players are, there can’t be a conflict between these two objectives. They need to be one and the same. In our case, we were designing for adult players who’d like to have a small RPG game that would be easy to access and have some depth to go for. With that insight, we didn’t have the kind of problems you describe. “For these people, it’s important that the game flows nicely, that it’s welcoming, but it eventually gets complicated it enough keep their curiosity going. For this particular goal, these are the mechanics we should use.” If we’d applied other types of things, it wouldn’t have worked.

That’s the answer, to be respectful and mindful of your audience. Who are they, and what are their expectations? If you completely against them, you’ll have a hard time breaking through.