Daily Management Review

Angry Birds are going to IPO


08/24/2017


Rovio Entertainment, creator of one of the most popular mobile games Angry Birds, can enter the stock exchange in the coming weeks. The developer hopes to attract about $ 400 million on the Finnish exchange during the IPO, due to which its market capitalization will amount to $ 2 billion.



Garrett Heath via flickr
Garrett Heath via flickr
Nowadays, Rovio Entertainment employs more than 400 people in Finland, Sweden, the United Kingdom, the United States and China. The "angry birds", thanks to which the company has become famous, now adorn clothes, souvenirs, food, movies and even have their own thematic amusement parks. However, all was different just ten years ago.

The Finnish developer’s history began in 2003, when three students of the Helsinki University of Technology decided to take part in a contest for mobile games developers, organized by Nokia and HP. They won it by creating one of the first multiplayer mobile games King of the Cabbage World, in which two moles (players) tried to kill the opponent with exploding vegetables. Immediately after this contest, they founded Relude company. The game itself was immediately sold to Sumea and renamed The War of Moles.

Rovio as such was born in January 2005, when the Finnish developers managed to raise the first round of funding, and the company was renamed Rovio Mobile (Rovio means "bonfire" in Finnish). For several years the company has been developing video games - action games, shooters and races - on the Java 2 ME platform.

Finnish guys saw their first real success in 2009. The company then was headed by Mikael Hed. In December of that year they released an arcade for the iOS, where users used a slingshot to shoot birds at green round pigs that stole the birds’ eggs. Six months later, Angry Birds topped the rating of the most downloaded subscription games for iOS, and Rovio began to produce two or three franchise games every year. With the initial investment of € 100 thousand, the company’s revenue reached € 75.4 million by 2011. The game’s popularity is evident in the number of downloads. In 2011, different versions of the game were downloaded about 500 million times, in 2012 - 1 billion, in 2014 - 2 billion times, in 2015 - 3 billion times.

In April 2012, Angry Birds Land was opened in Finland, in 2013 - a series of postage stamps dedicated to Angry Birds was released. In March 2013, the Finnish developer (by the time already Rovio Entertainment) launched cross-platform ToonsTV TV channel, where the company published short cartoons about evil birds and pigs, thus transferring their characters to the animated world.

From 2014 to 2016, the company changed its CEO twice, went through a wave of cuts and a decline in revenue. New games about birds and pigs were not as popular as the original part, and merchandising did not bring the expected profits. The real salvation for the Finnish company was full-length The Angry Birds Movie, which was released in 2016 and raised $ 350 million. As a result, the company returned to profit: according to the results of the first half of 2017, the company's revenue reached € 152.6 million, and net profit - € 31.6 million. Rovio’s team intends to invest the same funds, raised during the upcoming IPO, in the movie’s second part.






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