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April 3, 2013 8:19 pm
The maker of the popular mobile game Angry Birds has pointed to life beyond the screen, reporting a doubling in revenues in 2012 that is led by growing sales of spin-off products such as plush toys and stationery.
Privately-held Rovio, based in Espoo, Finland, said that sales of merchandise such more than tripled last year to €68.5m, and accounted for 45 per cent of its revenues. Net profit rose 56.8 per cent from 2011, to €55.5m.
Those revenue figures are equivalent to 59 euro cents a year from each of the company’s 263m active users.
“Rovio has grown from a phenomenon to a very successful global business,” Mikael Hed, chief executive, said in a statement. “In 2010 we set out to build an entertainment company and after last year’s performance we are on a strong path to achieving our goal.”
Rovio now has nine games including the original Angry Birds, of which five are in the top 100 paid apps on Apple’s iTunes store. Yet while they have now been downloaded 1.7 billion times, Rovio’s sales is benefiting more from the broader awareness of the games’ characters, such as its assorted avian heroes and the angry green pigs that steal their eggs.
“A couple of years ago, very few people believed Rovio about building a true brand franchise,” said Rich Wong, a partner at Accel, a venture capital group with a 10 per cent stake in the company.
“There are very successful pure play investments, with a gaming-only focus, but there are others that are seeking to diversify,” he added.
A big reason for this expansion into other products is increased competition on the app store, with consumers now able to choose from a host of paid and free games online.
“Thousands upon thousands of games are being released every year, so companies are doubling down on proven intellectual property. Organisations are becoming more risk-averse – making fewer games but larger bets,” said Scott Steinberg, strategic innovation consultant at TechSavvy. “Rovio had many failures before it had a hit. Now it’s had a hit it’s looking to get it in front of as many people as possible.”
In March, the first episode from its cartoon network, Angry Birds Toons, became available to those using the games. A total of 52 episodes, each less than three minutes in length, will be released over the next year.
Other games companies are also seeking new revenue streams. In March, publisher Egmont announced that it would produce four official books linked to the popular game Minecraft. Last year Zynga agreed a deal with Hasbro to develop board game versions of its popular offerings such as FarmVille.
Rovio’s future plans include a 3D feature film, led by John Cohen, producer of Despicable Me, and set to screen in 2016.
Mr Wong likened the process to the emergence of Superman and Spiderman. “When I was young, characters were developed through comic books. Mobile games are now where the concepts are coming from. Rovio has set an example.”
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