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RetailAngry Birds

Why the company behind Angry Birds is in serious trouble

By
Ben Geier
Ben Geier
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By
Ben Geier
Ben Geier
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March 19, 2015, 11:54 AM ET
The Toy Fair
LONDON, ENGLAND - JANUARY 25: Angry Birds plush toys on display at the Toy Fair 2011 at Olympia Exhibition Centre on January 25, 2011 in London, England. (Photo by Tim Whitby/Getty Images)Photograph by Tim Whitby — Getty Images

Last year turned out to be a bad one for Rovio, the makers of Angry Birds. The privately-owned Finnish company saw its revenue drop more than 8% and had to cut its workforce in response to dipping merchandise sales and the falling popularity of its main brand.

From the Wall Street Journal:

Last year Rovio’s revenue dropped to €158.3 million ($170.5 million) from €173.5 million in 2013, and its 2014 operating profit was €10 million, down from €36.5 million in the previous year, the company said.

In response to flagging sales Rovio cut 110 jobs, or about 14% of its workforce, late last year. The company also saw its longtime Chief Executive Officer Mikael Hed step down. Mr. Hed was succeeded by Pekka Rantala who had previously worked at the Finnish telecom equipment maker Nokia Corp.

Rovio’s problems also stem in part from failing to adopt the “freemium” model in which games are free at first but then charge users for various in-game upgrades. Instead, Rovio has mostly stuck to charging customers one initial price for fully-featured games.

While it’s been a tough year for Rovio, the overall mobile gaming market is healthier than ever. It’s so robust, in fact, that earlier this week old-school gaming giant Nintendo decided to start working on mobile platforms.

About the Author
By Ben Geier
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