Angry Birds, the hit mobile phone game, is catapulting its developer Rovio’s revenues towards $100m this year, around a tenfold increase over 2010, with downloads soaring to 600m since its launch two years ago.
As its merchandising business begins to take flight, offering everything from Angry Birds cuddly toys to playground equipment, Finland-based Rovio holds high hopes of eventually building itself into a home-entertainment brand on the scale of Walt Disney.
The company could list on the stock market in New York or Hong Kong in the next few years, after March’s $42m fundraising from Accel Partners, an investor in Facebook, and Atomico Ventures, which was set up by Niklas Zennström, co-founder of Skype.
Ville Heijari, vice-president at Rovio, said press reports in Finland that Rovio was aiming for an initial public offering in 2013 with a valuation approaching Disney’s $65bn market capitalisation were “very premature” but he added: “It would be very, very bullish to say we are in that scale in, say, two years, but this is the ambition level. The long-term vision is to become a household-name entertainment company globally.”
While analysts warn Rovio risks becoming a one-hit wonder, Angry Birds perched atop Apple’s year-end rankings for bestselling iPhone and iPad apps, with its Seasons and Rio spin-offs also in the top ten.
Other independent game developers are aiming for Angry Birds’ online and offline success. Zeptolab, the Russian creator of Cut the Rope, is soon to launch a digital comic book for iPhones to tell the story of its Om Nom character. Mind Candy, the London-based developer of Moshi Monsters, the virtual pets meets social networking site with 50m users, expects to sell 20m toys in the UK by this Christmas.
Rovio is hatching plans for 2012 to expand its game development studio in Finland in order to churn out several more Angry Birds games, as well as opening a sales office in Shanghai. “China is our fastest-growing market,” Mr Heijari said.
It has seen unlicensed Angry Birds toys appear from China as well as copycat games, but Mr Heijari expects merchandising revenues to increase “significantly” in 2012. Next year could also see Rovio use its huge fanbase to launch other games, either developed in-house, from third-party developers or acquired by the company.
“I don’t know any other app company that has created such a big globalised brand – it’s almost become a cult. They are developing a lot of new capabilities and products so we will continue to see strong growth next year,” Mr Zennström told the Financial Times. “You’d rather invest in management teams that are over-ambitious than under-ambitious. They have very big plans and they are executing well.”
But Benedict Evans, mobile analyst at Enders Analysis, warned that Angry Birds risked becoming like Eidos, the Tomb Raider developer which ultimately failed to diversify by developing other titles. “Rovio have shown they are very good at exploiting a hit – they have yet to show they can reliably produce a flow of hits,” Mr Evans said. “Disney is not one property, it’s 50 properties.”