Rovio, creator of the blockbuster Angry Birds series of mobile games, today reported its full-year results for 2012. While the company continues its rapid growth — now at 1.7 billion game downloads, and 263 million active users as of December 2012 — increasingly that scale is being leveraged to drive non-gaming revenues in areas like IP licensing and merchandising. Rovio today reported that sales are up 101% over 2011 to 152.2 million euros ($195 million), with net profit also rising to 55.5 million euros ($71 million), with some 45% of Rovio’s revenue now coming from “consumer products”. Last year, that proportion was 30%.
Ebit margins are now at 50%, with Ebit now at 76.8 million euros.
The move to grow the Rovio brands, to help boost its non-gaming business and the activities of its New Business Ventures unit, has seen a shift in the kinds of gaming products that the company launches.
Whereas before there was more of an emphasis on paid games, these days you are more likely to see free launches from the company, such as this App Store promotion for the original Angry Birds game for free in March.
That reflects wider trends in the industry, where companies like Supercell have made a killing on free games that use in-app purchases to rake in revenues. But it also means that as games like Angry Birds continue to mature, making them free will give them a much wider net to bring in new users, who will also in turn potentially become consumers of these other Angry Birds products.
Rovio also notes that this shift will mean that it’s also becoming a more proactive guardian of its IP:
“Year 2012 was another record-breaking year for Rovio. We doubled our revenue with an EBIT margin of 50%, more than doubled our headcount, established new offices and a New Business Ventures unit,” said Rovio CFO Herkko Soininen in a statement. “Also, to protect our own, as well as our partners’ and our fans’ interests, we continue to invest heavily in brand protection globally.”
That’s a big change compared to two years ago, when “Mighty Eagle” Peter Vesterbacka noted that he didn’t mind it when Angry Birds got copied.
In reference to the Chinese market in particular, he noted: “We’d much rather sell and officially license products there, but if no one copied us that would mean that nobody cares,” he said back in 2011. “Next year, our ambition is to be the most copied brand in China because that would mean we are the leading entertainment brand there.” So much for that.
In the gaming business, which is still 55% of revenues, the company launched Angry Birds Space, Amazing Alex, Bad Piggies and Angry Birds Star Wars in the past year, with all of its gaming properties together accounting for 263 million active monthly users. As you would expect, Rovio notes that the main revenue sources among the gaming segment are paid games, virtual goods, and advertising, although it hasn’t broken out specific values. (We are reaching out to ask for them.)
The company also notes that it now has a some 518 employees, more than double the 224 headcount it had in 2011.
Full release below. Refresh for updates.
Espoo, Finland – Rovio Entertainment Ltd, the world’s leading provider of mobile entertainment and creator of the Angry Birds franchise, today had the pleasure of announcing its financial results for the full calendar year of 2012.
Total consolidated full year revenue grew by 101%, driven by a healthy growth in games revenue and consumer product sales, and amounted to €152.2 million (2011: €75.6 million). Earnings before interest and taxes (EBIT) were €76.8 million (2011: €46.9 million), up 64% from year 2011, and net profit after tax was €55.5 million (2011: €35.4 million).
“Year 2012 was another record-breaking year for Rovio. We doubled our revenue with an EBIT margin of 50%, more than doubled our headcount, established new offices and a New Business Ventures unit.” said Rovio CFO Herkko Soininen. “Also, to protect our own, as well as our partners’ and our fans’ interests, we continue to invest heavily in brand protection globally.”
“Rovio has grown from a phenomenon to a very successful global business. In 2010 we set out to build an entertainment company and after last years performance we are on a strong path to achieve our goal.” Mikael Hed, Rovio CEO said.
Strong growth throughout all business segments
The financial outcome of 2012 is very positive for Rovio. Games and Consumer Products business units had a healthy growth and the company made good progress with its entertainment business.
In 2012 Rovio launched four major chart topping games. Angry Birds Space, Amazing Alex, Bad Piggies and Angry Birds Star Wars catapulted the total number of Rovio game downloads to more than 1 billion in May 2012 and the total number of active monthly users, across all platforms, to 263 million in December, 2012. Driven by these launches Rovio’s Games business unit’s revenue continued to grow fast. The main revenue sources of the games business are paid games, virtual goods, and advertising.
The Consumer Products business unit’s revenue for 2012 was more than three times the revenue of 2011 and accounted for 45% of Rovio’s total revenue.
The number of employees grew from 224 to 518 during the year 2012.
Market and business development expectations
Future business will to a large extent depend on the success of new game launches, the company’s ability to keep its fans engaged with Rovio content and the success of new initiatives in 2013. The sales of new devices and fun, entertaining content remain the main drivers for mobile game downloads and Angry Birds Toons channel views. Rovio expects its business to continue to grow and by today, the total number of Rovio game downloads has exceeded 1.7 billion.
“We have had a stellar start for this year. In addition to our successful games portfolio we recently launched our first Angry Birds Toons series through third party partners and our own in-game distribution channel. We will continue to strengthen our position in the entertainment business through continuing to innovate on our existing brands, exploring creating new IP as well as exploring opportunities with external parties,“ Mikael Hed said.
Note: Rovio Entertainment Ltd’s financial statements are prepared in accordance with the Finnish Accounting Standards (FAS).