Rovio Entertainment, the maker of the “Angry Birds” mobile game, on Friday said the company needed to come up with new games to drive growth and warned that sales would fall this year after reporting higher third-quarter profits.
The Finnish company, which listed its shares on the stock market in Helsinki last year, reported third-quarter adjusted operating profit of EUR 10.4 million ($11.8 million or roughly Rs. 84.77 crores), up from EUR 4.0 million (roughly Rs. 33 crores) a year ago.
But Rovio said tough competition and high marketing costs would put pressure on its full-year outlook. The group said it expected 2018 sales to be between EUR 280 and 290 million (roughly between Rs. 2,281 and 2,362 crores), compared with a previous range of EUR 260 and 300 million (roughly between Rs. 2,118 and 2,444 crores). Last year, the company had revenues of EUR 297 million (roughly Rs. 2,419 crores).
“It is clear that we need new games in order to accelerate growth,” Rovio’s Chief Executive Kati Levoranta said in a statement, adding that the company planned to launch at least two new games next year and had another ten projects in the pipeline.
Rovio grew rapidly after the 2009 launch of the original “Angry Birds” game, in which players used slingshots to attack pigs who stole birds’ eggs. The company expanded into film with an Angry Birds movie in 2016, but more recently has been hit by its high dependency on the Angry Birds brand and tough competition.
After its initial public offering in September 2017, Rovio’s shares dropped 50 percent in February after the company said its sales could fall this year after 55 percent growth in 2017.
Rovio expects a movie sequel to boost business next year and the company has also stepped up investments in its spin-off company Hatch, which is building a Netflix-style streaming service for mobile games.
Full-year core operating profit margin is seen at 10-11 percent, up from a previous view of 9-11 percent.
© Thomson Reuters 2018