Finnish developer Rovio, creator of the Angry Birds games and all of the subsequent spin-offs, yesterday reported the company's first big decline in profits since the original Angry Birds game launched in 2009 (via VentureBeat).
Though the company's mobile gaming business did see a slight 16 percent rise in revenue, a huge drop in Rovio's licensing business, which includes the various toys, t-shirts, and action figures related to its games, was the true culprit of the company's decline last year. Not to mention other mega-hit franchises, like Candy Crush Saga, slowly taking the once-dominant spotlight of Angry Birds.
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The company's revenue dropped to €158.3 million ($170 million) in 2014, from €173.5 million ($185.6 million) in 2013. Likewise, Rovio's operating profit also fell last year to €10 million from €36.5 million in 2013 and €76.8 million in 2012. Rovio CEO Pekka Rantala hopes a steady release of new games and a renewed focus on advertising will pivot the company in the right direction for 2015.
“2014 results show that steps in the game portfolio, free to play competency building and advertising are going in the right direction. I am confident that with new simplified organisation and clearer vision, we will be back to the path of growth in 2015,” said Pekka Rantala, who took over as chief executive last fall, in a statement.
Rovio launched six new games in 2014, no doubt helping to bump up its mobile gaming revenue, with more than 600 million new game downloads for the company. It's also already launched two new games in 2015, Jelly Jam and Angry Birds Stella POP!, which Rantala hopes will keep the brand's momentum going through the first half of 2015.
Although it's not to be released until the summer of 2016, Rantala also points to the buzz surrounding the Angry Birds movie as a boon to the company's wilting licensing business. The company will produce the movie, which is set to star Jason Sudeikis, Josh Gad, Maya Rudolph, and Peter Dinklage.
Rovio no doubt hopes for the film to pick up the slack where Angry Birds Toons, Rovio's 2013-launched animated kids TV show, has failed to increase the company's licensing business year-over-year. Rantala notes that the film already has received "very positive reactions from major retail and license partners as well as from consumer focus groups", which he and the company predict will translate into booming licensing deals in the coming years.
Top Rated Comments
I played it in 2013, but the fad gets old, especially when the newest version of the original Angry Birds gets polluted with ads and in-app purchases. I PAID for the game not to get inundated with ads. So no wonder profits are down.
They are in a great position with the resources to create and market new games. Strong growth will naturally follow if they do that. Chasing growth by attempting to monetize each pixel rendered at the expense of game play is going to fail badly and rather quickly.
They need to come up with a new idea. Also, ditch the damned in app purchases. Angry Birds was successful because it was a fun game that spread by word of mouth, that you only had to buy ONCE and it was yours forever. The in-app purchase junk has really ruined the mobile game experience.