Clash of Clans maker Supercell's profit grows despite Pokemon challenge

HELSINKI (Reuters) - Finland's Supercell, the maker of hit mobile game Clash of Clans, reported on Wednesday core profit rose 8 percent last year, helped by the launch of a new game and despite the challenge from Nintendo Co's smash hit Pokemon GO.

Supercell, majority owned by China's Tencent Holdings Ltd, said earnings before interest, tax, depreciation, and amortisation rose to 917 million euros ($967 million) last year from 848 million in 2015.

With largely flat revenue of 2.1 billion euros, the profit improvement was partly due to lower spending on advertising and the successful launch of its latest game, Clash Royale, it said.

"Despite tighter competition, this was the best year so far in financial terms. Clash Royale was a huge hit," Chief Executive Ilkka Paananen told reporters.

Clash of Clans, a war strategy game in which players build fortresses, form clans with other players and battle it out in a Medieval-style fantasy world, has remained on the list of top-earning applications since its launch in 2012.

In 2016 it was ranked No. 2 after Mixi Inc's Monster Strike, according to research company App Annie. Clash Royale was No. 5.

Augmented-reality Pokemon GO, which has players walking around real life neighbourhoods to catch and train Pokemon, has the biggest number of active users, but in revenue terms it fell behind Clash of Clans.

Supercell, also creator of Boom Beach and Hay Day, banks on a handful of games, a strategy that has helped it avoid the problems faced by the likes of rival Rovio Entertainment, which has failed to create a new hit game since its 2009 launch of Angry Birds.

"At the moment, we are not taking new games into beta tests, perhaps later in the year," Paananen said.

($1 = 0.9479 euros)

(Reporting by Tuomas Forsell, writing by Jussi Rosendahl; editing by Susan Thomas)