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Rovio Cancels IPO Plans

Posted on Thursday, Mar 20th 2014

A report issued by Digi-Capital earlier this year estimates the mobile and online gaming industry to grow 24% annually over the next few years to be worth $60 billion by 2017. The report estimates that the increasing popularity of mobile games will help drive the game software industry’s revenues to more than $100 billion by 2017.

Rovio’s Growing Library
Angry Birds fans are waiting for one of their big Angry Birds game versions, Angry Birds Epic. This latest version of the game is a role playing game that will feature the turn based combat system. The game will essentially allow users to be birds in a piggy island and go through story based campaigns instead of knocking down structures. Like the other Angry Birds versions, the game will be free to download and Rovio will earn revenues through in-app purchases such as upgraded weapons and characters. The game was soft launched in Australia, New Zealand, and Canada this week and is expected to reach the other markets shortly.

Besides newer versions, Rovio is also growing their Angry Birds franchise through additional product offerings. Recently, they tied up with Hasbro to release Stella Telepods. Telepods are essentially small toys characters that come with a unique QR-code that lets these toys replace the character appearing in the slingshot. Rovio has already tied up with Hasbro to release over 30 Telepods from their Star Wars  and Stella collections.

It is not just the Angry Birds series that is being upgraded. Recently, Rovio also announced the release of Stan Less’ cartoon character Chakra the Invincible on their ToonsTV channel. Stan Lee is best known for his characters including Spider-Man, Iron Man, and X-men. Chakra the Invincible is another one of his super hero creations based out of Mumbai. The series was created by Graphic India and POW! Entertainment.

As part of their international expansion efforts, Rovio grew their customer support language offerings. Now, customers can have their problems solved by reaching out to their staff in Finnish, English, Dutch, German, Italian, Russian, Spanish, French, Turkish, Japanese, and Korean. Rovio plans to add Portugese, Chinese, and Bhasa Indonesia to their portfolio to take the total languages supported by them to 14.

Last quarter, Rovio also announced  a tie-up with GungHo Online Entertainment, a Japan based multi-platform publisher best known for their mobile title Puzzle & Dragons. As part of the agreement, for a limited time period, players were able to access an Angry Birds-themed event dungeon with popular Angry Birds characters within Puzzle & Dragons.

Rovio’s Financials
Rovio does not disclose their financials. Their last disclosed performance for the year 2012 revealed revenues nearly doubling to $194.8 million driven by a 45% contribution of consumer products. Rovio’s profits increased significantly from $25 million in 2011 to $71 million in 2012. The company was expected to earn revenues of $365 million last year.

Meanwhile after several months of will they or won’t they, the Angry Birds game maker has finally decided not to go for an IPO soon. Instead, the company is focusing on expanding their geographic and market presence. This is a smart decision, as one-hit wonders tend to struggle in the public market. Rovio must diversify its portfolio before attempting an IPO, and learn from Zynga’s example.

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