Rovio, the maker of Angry Birds, saw its profits dip more than 50% to $US37 million in 2013, compared to $US77 million the previous year.
Its revenue for 2013 was $US216.33 million (€156 million), which was up just 2.5% from 2012 when revenue was $US211 million (€152.2 million.)
This is a big deceleration in growth. In 2012, revenue was up 101% year-over-year, and profits were up 57%.
The massive drop in growth reflects changing world of mobile gaming.
Rovio was one of the first break-out iPhone games, making money by charging millions of users $US1 per download.
But, the App Store, and mobile gaming, changed. The most successful games are now free to download, and rely on in-game purchases. Candy Crush, for instance, generated $US1.5 billion last year. It’s free to play, but if you want to speed up game play, you can pay for things in the game. In 2013, Supercell, makers of Clash of Clans, saw its revenue soar nearly nine-fold, with earnings of $US464 million on revenue of $US892 million.
Rovio attempted to master the freemium space with the launch of Angry Birds Go back in December, but it’s currently only the 179th top grossing iPhone game. Clash Of Clans is the number one top grossing iPhone app in the iTunes Store. Candy Crush Saga is right behind Clash of Clans at number two.
This is a set back for Rovio, which had ambitions of becoming the next Disney. It wanted to use the Angry Birds franchise to launch itself into a number of different industries.
It seems like that’s unlikely to happen.
This also reflects the fickle nature of mobile gaming. Zynga was a hot company, then it wasn’t. Angry Birds was a hot company, then it wasn’t. Candy Crush was the hot game, and even it’s in decline.
Making a successful mobile game is hard. Making multiple, sustainable gaming franchises is nearly impossible, it seems.