Frontline Marketing

Rovio Entertainment Investing Big for 2016

By | February 19, 2016 |

Since cutting one-third of its employees last August, Rovio Entertainment has been focusing more on expanding its Angry Birds brand of games and building out its Toons.TV network.

wilhelm-tahtWilhelm Taht, head of games at Rovio Entertainment, said at Casual Connect Amsterdam this week that the company wants to grow revenues significantly in 2016.

“We’ve grown revenue every year since Angry Birds was launched,” Taht said. “Our focus for 2016 and beyond is continued revenue growth, doubling down on performers, and increasing the speed of innovation.”

That believes two years from now new genres will break into the Top 10 mobile games list in the Western World. Rovio is already exploring new genres, including a “mystery mid-core game” that it’s testing that has had over a 60 percent retention rate.

Taht showed art for a new Angry Birds game coming out later this year that featured more detailed and less cartoony 3D characters, as well as an anime-inspired mid-core game art.

“We’re trying to age up the audience,” Taht said. “We have a fairly sizeable adult audience, but we’re actively trying to age up.”

The bulk of Rovio’s audience comes from Angry Birds. The company had successful launches for Angry Birds Fight! and Angry Birds 2 last year, and has continued to expand that brand across multiple cross-branded ventures from Angry Birds Star Wars to Angry Birds Transformers.

Taht said in 2015 Rovio had over 3 billion game downloads and over 5 billion views on its ToonTV service. The company has over 26 million fans on Facebook. Brand awareness for Angry Birds is above 90 percent brand awareness, which should help with the May 20th launch of the Sony Pictures’ Angry Birds feature film. Taht joked that the film is the most expensive mobile game trailer ever made.

“We have $100 million behind the production of the movie and much more on marketing, hopefully it’s going to succeed,” Taht said. “All of us feel happy about where it’s heading this spring. It’s the first blockbuster-level Hollywood movie originating from the mobile games industry.”
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Taht said the goal moving forward is to grow new IP beyond Angry Birds. He said the company had had success with its Match-3 game, Nibblers, which launched last fall. Rovio is scaling the game up significantly and is seeing a daily conversion rate of over 2 percent.

The company continues to develop original games. Last fall it released the Drop-3 puzzle game, Love Rocks, in conjunction with singer Shakira. It was a continuation of what began as an Angry Birds marketing partnership.

Taht used a lot of recent mobile figures from Newzoo to show the opportunities that exist for Rovio and other developers in the evolving mobile games business. While Android is currently the leader in games when it comes to reach, iOS continues to generate more revenue.

“In the U.S., about 37 percent of the 1,000 game revenues is generated by the Top 10 games, so there’s more space to generate revenue at the top than there used to be,” Taht said. “You no longer have to focus on being in the top 10.”

The U.S. is also seeing movement in the top mobile game genres. The Battle genre remains on top, while the Puzzle genre has been fluctuating a lot as some mobile unicorns have leveled off. Casino games are growing significantly. And modern RPGs are starting to grow in the West. Simulation games are also growing. One area Taht said there’s room for success in is the Racing genre, which has yet to be cracked for mobile.

Taht referenced the $25 billion the mobile games industry generated last year, which eclipsed the $6.9 billion the digital music business made and the $11.1 billion the U.S. box office generated in 2015. Mobile is now a larger segment of the $91 billion video game industry than console games.

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“More time is spent on mobile devices than on browsers, and hence there’s billions to make,” Taht said. “It’s still a gold rush, but it’s become a really crowded place with 179 new games coming out every day and over 300,000 iOS games in the App Store.”

Rovio was one of the early mobile companies to expand its IP into merchandising. The company continues to market Angry Birds through licensing deals that range from clothing to plush toys. And the upcoming Hollywood movie launch will only open additional opportunities for the studio.

Rovio means “raging fire” in Finnish, and Taht said this name ties into the company’s culture.

The company hopes to keep its fire burning in 2016.