Rovio’s 3D Angry Birds movie will cost more than $160m by summer 2016 and company seems to betting on this for its profits
Rovio’s slingshot-based game was the most liked paid mobile app in the year 2009 when it was introduced and now in December 2014 this app was also introduced to Apple play store. However, the initial glory which the company enjoyed during 2009 seems to be missing and it is trying hard to manage its financial position hence now Angry Birds is hoping to get a tremendous success in its upcoming Angry Birds 3D animated movie which it expects to bring it back on track with the profits.
As per a report from Reuters: “Finnish mobile games maker Rovio pinned its hopes on Thursday on a costly 3D movie project helping it return to growth, after a 73 percent profit drop gave the latest sign its mainstay Angry Birds brand is losing appeal.” The report also states that as per Rovio although revenue from mobile games grew 16% to 110.7 million on the back of new offerings; however the overall total sales fell 9 percent last year to 158.3 million euros ($169 million). “As (Rovio’s) franchise begins to falter, the question of whether it is a one-hit wonder rears up again,” said Steve Bailey, games analyst at IHS Technology.
Angry Birds was suppose to release its movie in the year 2012 however now Rovio and Sony Entertainment’s Columbia Pictures have announced that the movie will not be released till summer 2016. Also the expected cost of the movie will go beyond $160m by then. According to a report by Reuters the company’s operating profits have also collapsed from 36.5 million euros to 10 million. Rovio’s aim seems to become an entertainment brand at par with Walt Disney hence it has also expanded Angry Birds into a spin-off TV series and is now producing an animated movie which would be released in summer 2016. Rovio CEO Pekka Rantala said: “The movie will help us get the licensing business back to growth; pretty soon we will be able to publish new major partnership deals.”
As per the report Analysts pointed out that Rovio’s response was slow to bring about the shift from paid apps to freely available apps as it would have earned its revenue from in-game purchases and advertising. In response Rantala said :”We are still in transition, we have launched free-to-play games but there is room to improve the monetizing in this area.”
With the company’s overall finance collapsing and the huge funds which Rovio is using in production of the 3D animated movie set to release in May 2016, seems to be a gigantic gamble for Rovio and Sony Entertainment.