Angry Birds may have fallen off the radar for the general gaming public, but it launched a media empire for Finnish developer Rovio Entertainment. The company created not only a sizeable library of mobile games that have been weirdly successful for as little as anyone hears about them, but it also expanded into merchandising and created the best-reviewed video game movie of all time.
Now Rovio might have to start laying people off.
Rovio released its quarterly financial report at the end of October and for those whose eyes glaze over at the mere mention of business finance, a first glance at the report might make it seem like good news.
The company has brought in more money this year than last year! All of its games are making more money than ever! It has launched more titles! It even has a movie! Surely the outlook continues to be positive for Rovi--wait, what's that at the end of the heading again?
What that generously-worded phrase means is that Rovio spent money which it hasn't made back. On its own, that's not a terrible thing since you have to spend money to make money. But when you dig deeper, it seems that profits are down 49.1 percent this quarter, which is, you know, a lot. Rovio's still making a profit, but it's making less profit, which is always bad news for a publicly-traded company.
Most of the money spent was around the release of the second Angry Birds movie in August, which made a little more than a third of the money that the original movie made.
While the report tries to cast the entire debacle as a strategic choice that'll only increase profits in the long run, it does include this little tidbit:
Consequently, we have started employee cooperation negotiations in the Brand Licensing unit and are planning to restructure the unit to seek efficiencies and improve profitability.
For those who don't speak Bureaucrat, let me translate: in order to keep the money coming in, some people with jobs at Rovio will soon find themselves without jobs.
So, while Rovio will probably continue to succeed as a massive media company that most of us barely pay attention to, in the near future, it'll be continuing to succeed as a slightly smaller massive media company.