The mobile game sector in turmoil
Rovio operates in a sector, the mobile game growing. IDC and App Annie market (excluding handhelds) expected to be approximately $ 6 billion in 2013. In 2014, IDATE estimates that represent 7.6 billion euros. Smartphones and tablets are by far become the preferred platform mobile game for consumers, the latter particularly plebiscite Apple products.
While Rovio is still far from achieving the benefits of Japanese Gree ( Knights & Dragons, Kingdom Age, Monster Quest ...), which made a net profit of $ 218 million during its last fiscal year, the Finnish is one of the most profitable companies in the sector. In 2012, she published a turnover of $ 195 million (more than doubled in one year) and a net profit of 71 million. This is three times more than the benefits of Gameloft, for example, and far ahead of Mojang ( Minecraft ) and $ 28 million loss. Early 2013, Rovio had more than 250 million monthly active users.
The law of contract: unattainable profitability or mega jackpot
Despite the excitement of this market, its players do not earn money, far from it. 90% of games available on Google Play and the App Store are free. In 2012, only two games in the Top 20 on the App Store were paid. The economic model that prevails today is the free-to-play or "freemium", which is to distribute the game for free, to pay for purchases in-app , which serve to enhance performance and enrich its experience To play this strategy to be profitable, it must reach a critical mass of players, because few are willing to pay and the average amounts paid are low.
Nevertheless, it is the model that is required. IDG expects sales of virtual goods should exceed 50% of income online market in 2016, and Newzoo believes that the free-to-play represents around 70% of European and American market. Although few believed in sustainability and profitability at the beginning, the success stories of Japanese GungHo Online or Finnish Supercell convinced otherwise. Puzzle & Dragons GungHo to generate $ 2.5 million per day, according to IDATE . The company, which publishes games for consoles and PC, achieved a net profit of $ 287 million in the first half of this year, reports La Tribune . Clash of Clans (SuperCell) meanwhile the returns from $ 2.4 million per day worldwide.
"The price of very low sales of these games do not, with rare exceptions, create a return on a single production. Companies must engage in a process of catalog production that requires large financial resources" notes SNJV (National Union of gaming). Strategy catalog is for example that Gameloft ( Despicable Me, GT Racing, Tank Battles ...).
According to an analyst quoted by La Tribune, "on the top 250, each download, including free game, reported an average of $ 0.93" . And according to IDATE, on average, 20 more games performance on the App Store generate revenue of nearly $ 4 per player over their entire lifetime.
Once the machine is running, the games are much more profitable they are not very expensive to produce. Clash of Clans would cost less than € 140,000 to produce in two months, according to Boy Genius Report . "The return on investment is extremely fast when it works. Supercell has raised $ 130 million this year, is to invest in a team of developers, who enriches the games as and when, and data mining, basic to successfully understand the player profiles and generate in-game purchases, "says Laurent Michaud, specialist video games at IDATE.
However, with the number of applications made available each day on the app stores, attention becomes increasingly difficult. Over 400 games and apps appear every day on smartphones and tablets, as SNJV. To stand out, you must communicate. "For every euro invested in the development, we must invest one euro in marketing," says Laurent Michaud. "It is at least as important as the quality of the game Rovio received a first mover, arriving when the visibility in the App Store was better."
Rovio's strategy paying and derivatives
Or free-to-play or logic catalog, Rovio has not the same strategy as the other big names in mobile gaming. His story shows that it is difficult to get a place on the market. Before Angry Birds , Finnish is "planted" with 51 games and came close to bankruptcy . Then success came, and here the company has decided to focus on paid and one brand, declined to infinity.
Thus Rovio launched nine games Angry Birds ( Rio, Space, Friends, Bad Piggies, Star Wars ...), and has extended its license to entertainment and publishing, worldwide. Licensed products now represent 45% of its turnover, which is huge. Rovio has partnered with Nokia including Mattel, Hasbro, or Activision recently released Angry Birds Star Wars console. The nasty birds were small, and can be found in the full range of merchandising: mugs, stuffed animals, clothing, key rings, shells for smartphones, games ... There is also a cartoon of 52 episodes and a feature film is planned for 2016 . Most original, playgrounds open Angry Birds in Finland, Spain, the United Kingdom, China and the United States.
AFP PHOTO / Peter PARKS
The playground Angry Birds Shanghai.
The admission officer, Disney is a model for Rovio. "The key is that we build a brand, and can live through a variety of channels of entertainment. We create loyalty to the franchise," said an officer of Rovio VentureBeat . "This strategy is quite unique, Laurent Michaud analysis. Leverage a single universe is actually quite risky, but it is a strategy in line with the experience that people want to know, and with the air. Their goal is to work on a continual enrichment of the brand. "
For now, success is always waiting for you
Rovio deliberately put everything on Angry Birds . When he released Amazing Alex in 2012, a game that had nothing to do, the sound was much less successful. After a few weeks he left the top 10 of the App Store, then that Angry Birds stayed there two years!
Yet the success of Angry Birds can not be denied. At the moment Angry Birds Star Wars II is ranked 13 th of paid apps on the iPhone in the United States (59 th on Google Play), and the year 2013, Angry Birds Star Wars ranks 4 th and 5 on iPhone e iPad.
However Rovio attempts a foray into the free-to-play, with his latest, Angry Birds Go , a free game kart compatible with "Telepods" Hasbro, the same model as the game Skylanders , which s' is classified in the United States 2 e all categories combined apps on the iPhone, and 6 th on Google Play. Not bad for a first.
