While the game industry may be struggling with its transition to next-generation consoles and the rise of free-to-play mobile and social gaming, "Angry Birds" has still managed to make its creator’s profit margins soar past the competition.
This week, Rovio Entertainment announced that its revenue for the 2012 financial year grew 101 percent on profits from its iconic "Angry Birds" games, related merchandise, and new gaming franchises such as " ad Piggies" and "Amazing Alex."
According to the company’s 2012 financial results report, Rovio netted €152.2 million (roughly $195 million) in sales of games and other licensed products, compared to €75.6 million ($97.1 million) in 2011. Net profit amounted to €55.5 ($71.3 million) million for 2012, compared to €35.4 million ($45.5 million) a year earlier. Revenue from consumer products like the ubiquitous "Angry Birds" merchandise tripled in 2012, making up 45 percent of Rovio’s total revenue for the year.
Financial specifics aside, 2012 was a busy year for Rovio as the company tried to expand its inventory of games beyond the titanic "Angry Birds" brand. Along with the release of two new "Angry Birds" titles — "Angry Birds Space" and "Angry Birds Star Wars" — the company also released two separate titles, "Amazing Alex" and the "Angry Bird" spin-off puzzle game "Bad Piggies." This amounted to more than 1 billion downloads in May 2012 alone, the company said, with some 263 million monthly active users across its various mobile and social platforms.
"We have had a stellar start for this year," Rovio CEO Mikael Hed said in a statement. "In addition to our successful games portfolio we recently launched our first Angry Birds Toons series through third party partners and our own in-game distribution channel. We will continue to strengthen our position in the entertainment business through continuing to innovate on our existing brands, exploring creating new IP as well as exploring opportunities with external parties."
Of course, it’s difficult to make too much of Rovio's recent announcements no matter how "insanely profitable" the company claims to be. As a private company, Rovio can be more selective about what information it chooses to share than other up-and-coming game developers like Zynga, which has suffered from the most exaggerated bullish and bearish tendencies of Wall Street ever since it first went public in late 2011.
If Rovio ever plans to make a much-rumored IPO of its own, it will have to prove that it can diversify its revenue streams beyond just "Angry Birds." And while Rovio emphasized that the majority of its revenue came from paid games, virtual goods, and in-game advertising across all three of its franchises, it’s hard to believe that “Amazing Alex” or “Bad Piggies” made a significant dent in those figures. While “Amazing Alex” debuted at No. 1 on Apple’s iOS app store, the game fell precipitously downwards in paid app rankings shortly after release, according to a report from AllThingsD last September. “Angry Birds,” meanwhile, reached one billion downloads for the original game in 2012, began production on a film adaptation, launched a new cartoon series, and signed a deal with Comcast to make "Angry Birds Toons."
Escaping the enormous shadow that "Angry Birds" has cost on the mobile gaming market is no doubt challenging, and it’s not like Rovio hasn’t managed this for lack of trying. Just last month, Rovio released another new game, "The Croods," made in partnership with Dreamworks animation to complement the release of the studio’s new movie. But for Rovio to truly take flight beyond its most successful franchise, the studio may need to come up with something as unique as the original "Angry Birds" was.
Yannick LeJacq is a contributing writer for NBC News who has also covered games for Kill Screen, The Wall Street Journal and The Atlantic. You can follow him on Twitter at @YannickLeJacq and reach him by email at firstname.lastname@example.org.