The word Rovio brings to mind only one thing, Angry Birds. Every Android gamer has fond memories of that game and yet Rovio is suffering a dip in profits this year with their franchise. The sales of their games are down slightly as compared to their sales last year, thus reducing profits compared to what they made in 2012.
Even worse is the fact that Rovio recently made some new expansions which translate into having an extra 300 employees to pay and thus have even lesser balance to add to their accounts. This extra expenditure has added up to amount to about half the profit that they made last year. These extra people were hired recently to man Rovio’s new expansions into the Animation world, a theme park deal and a merchandising arm. Rovio, still unfazed by the falling profits, is confident to bounce back up into profitably. Perhaps they are confident that once all their recent expansions start up fully, the profits will be back. A case in point would be their merchandising arm whose sales of plush toys and other consumer products are, at present, responsible for half of the revenues that Rovio generates.
But despite those promising deals, there are ventures like the Angry Birds movie, scheduled for a 2016 release, that can be a hit or miss. So until that the entire brunt of the company has to be borne by the games. Although Rovio has launched some new games, including the highly anticipated Angry Birds Star Wars II, the games didn’t make as much as they made last year thus resulting in the slump in revenues. Rovio even launched freemium features for their games in order to boost income by enabling in-app purchases, but that have so far failed to push the revenues up enough.
Though all these features and expansions are in their initial phases and hence it is too early to predict anything for them. It will take at least till 2016 to see if Rovio has made the right choice in expanding or they are just another company with a one-hit wonder.