Angry Birds-Maker Rovio Has A Slower Year With Revenues Flat, Profits Down By About Half

Rovio, the maker of Angry Birds, had a slower year in 2013 as revenue flattened out and profits fell by about half on the company’s much higher headcount.

The Helsinki-based company pulled in $215.9 million in revenue last year, or just slightly above the $210.6 million it raked in 2012, according to results they released today.

With the company’s headcount at 800 up from 500 the year before, net profits fell by more than half to $37.3 million from $76.8 million the year before. Even though Rovio is privately held, it has to report earnings every year under Finnish law.

The company also did a major re-org on the games side after Jami Laes came on as Rovio’s new executive vice president for games. He previously worked at Digital Chocolate and EA. The former games EVP Petri Jarvilehto left to go on and co-found another gaming startup called Seriously with another Rovio alum Andrew Stalbow, who led strategic partnerships out of Los Angeles.

Unlike some of the other gaming companies out of Helsinki, Rovio hadn’t been as aggressive on free-to-play monetization and instead went for a more merchandising and licensing-heavy business model.

On the one hand, you have to wonder why the company wasn’t focused more on games as other Helsinki-based peers in the gaming industry like Supercell went on to earn $892 million in annual revenue last year.

On the other hand, the merchandising revenue probably cushioned some of the financial downsides that are inherent to the games industry being a hits-driven business. Consumer products made up 47 percent of Rovio’s total revenue last year and there are plenty of other global brands like Hello Kitty or Mickey Mouse that have endured for decades, even if they have become totally divorced from their origins.

Rovio also bought an animation studio and is still working on a feature-length animation film that is supposed to come out in the middle of 2016. They also bought an animation studio to create shorts on YouTube, started a publishing program to promote third-party games and built out several Angry Birds “activity parks” throughout Europe and mainland China.

The company says that it’s starting to put more effort into the free-to-play model, which uses sales of virtual goods and currency instead of paid premium apps. They did an Angry Birds Star Wars II game, and a racing game called Angry Birds Go!