Newzoo’s 2013 Global Games Market Report estimates that the worldwide online and electronic gaming market will grow 6% over the year to be worth $70.4 billion this year. The report estimates that by the end of this year, there will be more than 1.2 billion gamers worldwide. Growth in the market will be driven by emerging markets in Latin America and Asia Pacific, which are expected to be worth $3 billion and $25.1 billion, respectively, this year. Console games will remain the leading gaming platform with 43% of the market, translating to $30.6 billion. Smartphone- and tablet-based games are projected to grow 35% to $12.3 billion.
But the strong growth in the gaming industry is not spurring Finnish game maker, Rovio, toward an IPO. After months of speculation of “will they or won’t they,” Rovio is expected to have delayed their IPO plans yet again to possibly later next year. Rovio claims that financially, they are doing rather well and do not need additional funding through an IPO for now.
They have not disclosed their detailed financials, but analysts estimate that Rovio’s revenues more than doubled from $96.8 million in 2011 to $194.8 million in 2012, and they recorded $71 million in profits last year. Rovio’s revenue improvement is expected to continue this year, with the market projecting revenues of $365 million this year. Analysts, however, differ on Rovio’s valuation, with some pegging it to be worth $4 billion by the time the company comes up with an IPO in 2014, and others lowering their earlier estimates of $9 billion to $2 billion based on Rovio’s current performance.
Rovio consider themselves as an “entertainment” company and believe that they are more than just a gaming company. As part of this effort, they have gone beyond game development into merchandising and animation development. According to market reports, their move into consumer products has seen strong traction, with revenues from the non-gaming segment growing from $29.2 million in 2011 to $87.7 million last year. Rovio has more than 500 licensees worldwide selling products based on the Angry Birds franchise. Recently, they also released animated cartoons about the Angry Birds characters to keep fan interest strong. These cartoons tell the players more about the Birds and the Piggies in the game.
Earlier this month, Rovio also announced plans to publish third-party mobile game titles under a new brand, Rovio Stars. The games will feature new titles created by other talented developers. The first game expected to be released under this brand is A Viking Voyage developed by the London gaming studio, Nitrome, followed by Tiny Thief developed by 5 Ants.
For now, Rovio seems to be doing well by staying away from the IPO market and instead focusing on establishing their entertainment company.