Angry Birds creator Rovio is launching a completely new gaming franchise just weeks after laying off 260 staff.
In the new game, called Nibblers, a gang of fish climb out of the sea to explore the islands around their watery home, searching for fruit and dodging lizards to advance through 200 levels.
So far, the Finnish company has struggled to replicate the success of its original Angry Birds game. Its 2014 operating profit fell to $US10.7 million from $US39.1 million in 2013, and $US82.3 million in 2012. Its total sales fell 9% last year to $US169.6 million.
But Rovio chief commercial officer Alex Lambeek believes that the Angry Birds brand still has some clout left. Angry Birds 2 has had 50 million downloads since launching in July, and the company is also working on a 3D feature film set for release in May 2016.
Besides games, the company sells Angry Birds merchandise and runs Angry Birds theme parks in several countries including Finland, China and Spain. But in response to the last round of layoffs Rovio CEO Pekka Rantala admitted that the company “did too many things,” and was planning to “restructure and concentrate its activities around three primary business areas: games, media and consumer products”.
What follows is an edited version of Business Insider’s interview with Lambeek about the company’s plans to streamline its business.
Business Insider: Why is Rovio launching a new intellectual property (IP) now?
Alex Lambeek: First and foremost, 90% of our focus is on Angry Birds. That’s not going to change. It’s huge deal for us with the movie. But from time to time when we see something that we think would be pretty interesting as a new IP we bring it to the market and test it in an organic way see how our fans react. The initial testing that we’ve done in markets like Finland and Canada and New Zealand for Nibblers has been positive, showing good retention and amazing feedback. Which gives us the confidence then to polish it and launch it globally. If then you see that in the longer term it’s really going to grow into a huge thing — which we believe otherwise we wouldn’t be releasing it — then we start developing other products to support it.
Business Insider: When did you decide to develop it?
Lambeek: We’re testing new ones all the time. This has been in the development cycle for at least longer than a year. And we test these games and other IPs all the time. If we see one that tick certain boxes in terms of the feedback you get and the retention we decide to hard launch.
Business Insider: Can you give an update on the Angry Birds Movie?
Lambeek: It’s coming out in May 2016 and the teaser trailer will be out in a few weeks time. Just imagine these little birds and characters just starting to speak.
Business Insider: What it will do to the Angry Birds IP?
Lambeek: Suddenly there is a movie on the big screen addressing not just the games but the world. People who for one reason or another aren’t gamers but know about Angry Birds, they will be confronted by these characters who talk and through the movie get much more personality. There will be opportunities to do more after the movie in terms of products and games.
Business Insider: Is this part of what you’re doing to combat falling revenues?
Lambeek: I think every company needs to keep changing. We are really focusing on the things that are meant to define our future of our business — games and media, and of course consumer products. We’re working out new partnerships so that we don’t necessarily need to do so much in-house as we did before. So take China for example. There we’re partnering with a company called Kunlun which launched a Chinese version of Angry Birds 2 — practically the same game but the marketing is Chinese. An entire third of our downloads come from China.
Partnerships also manifest itself on the brand side. So we’re focusing more and more on working with fewer companies on our licensing side.
Business Insider: So you’re reducing the amount of licensing agreements you have?
Lambeek: I would say taking a different approach. Which means for example that we’re partnering with Lego. And Lego doesn’t just partner with anybody. When our movie comes out next year Lego will be involved in making the Angry Birds Movie toys and putting them out on the market. First of all they’re a very popular brand, very serious about how they approach their fans and their consumers, and that’s exactly how we want to be. We’re focusing on the quality of what we do and who we work with rather than spamming the market with Angry Birds and then worrying about the consequences. It’s a one step back sort of two steps forward kind of approach.
Business Insider: Pekka (Rantala, Rovio’s CEO) has said that in the past the company “did too many things.” Do you agree?
Lambeek: I’m not from Finland myself — I’m Dutch — but I think the Fins are very good at being honest about those kinds of things and yes, I think that’s right. We learned from that and then moved to the next stage.
Business Insider: So going forward you’ll be focusing on three areas — games, media and consumer products. What businesses will you be shedding?
Lambeek: It’s really about not growing too much in the other areas like theme parks. We will still have those on a licensing model, but it’s not something that we really want to be focusing on all that much. Where we may have been doing some things ourselves we will be partnering with other companies. An example for that is if you go to Thorpe Park we partner with Merlin. It’s so much better to work with the best in that area so we still can get the brand association but also the experience from the partners we work with.
Business Insider: You’re relying on fans liking the movie and associating more with the Angry Birds franchise after seeing it. Do you think this will happen?
Lambeek: Absolutely, if you take Angry Birds 2, now we’re on just over 50 million downloads on the App Store. With Angry Birds 2, with Nibblers on the new IP side, and some other surprises coming up post-movie the momentum is going to be huge.
Business Insider: The mobile gaming industry has gotten a lot more competitive since the first Angry Birds game launched. How are you planning to counteract that?
Lambeek: Where I think we differ essentially is that our IP has reached a certain Evergreen status, right? So Angry Birds is so wellknown it has 90% brand awareness in developed markets. We can do a lot with that. What we see ourselves as — an entertainment company with games at our heart might more about the entertainment company and less about the games at our heart. I don’t mean to sound arrogant in saying it, but there’s so much more we can do with the movie, with the character development. It’s so well known that’s where all the growth needs to come from. Of course the games are a big part of that but the media partnerships are about to become very important. At the end of the day it’s the fans and the relationship that they have with the birds and the pigs, whether it manifests itself on the big screen or the small screen or in gameplay.
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