Apparently, Angry Birds just isn’t paying the bills anymore. Finnish game developer Rovio Entertainment is prepping for another round of layoffs (its second in two years), today announcing plans to cut as many as 260 jobs — about 40 percent of its workforce — as losses at the company mount.
Rovio chief Pekka Rantala said the latest restructuring will help pare the company’s development focus down to three core pillars: games, media, and consumer products. “Rovio’s growth and eagerness to explore new business opportunities over the past few years have been exceptional,” Rantala said. “As a result, we did too many things.”
One of those things was Fun Learning, an experimental curriculum with games and digital puzzles aimed at kids three to six years old. Another, Angry Birds Playground, sought to encourage learning with Angry Birds-style dress. But these ventures met with limited success, and combined with a sharp decline in licensing revenue, resulted in a 73 percent slump in Rovio’s 2014 operating profits.
Rovio’s fallen far from its peak in 2012, when it raked in $82.7 million from a cavalcade of properties and had a reported headcount north of 800 employees. That year, its licensing income alone totaled $195 million. In 2014, by contrast, Rovio reported profits of $10.8 million and a 9 percent year-over-year decline in revenue.
If there’s a silver lining, it’s in Rovio’s mobile business. Angry Birds 2, the newest entry in the Angry Birds saga, racked up more than 50 million downloads in its first month of availability. And in its mobile division overall, Rovio notched a 16 percent increase in revenue to $119.3 million. (It attributed the strong performance to free-to-play mobile titles like Jolly Jam and Angry Birds Stella.)
Rantala anticipates the release of the Angry Birds Movie in July 2016 will reinvigorate the company’s licensing business. “Pretty soon we will be able to publish new major partnership deals,” he said. In the interim, however, slimming down’s the name of the game. “We must now put focus on where we are at our best: in creating magnificent gaming experiences, in producing an amazing animation movies and in delighting our fans with great products,” Rantala said.