Angry Birds took flight in the first quarter of 2020

Angry Birds took flight in the first quarter of 2020
Time flies when you're having fun, which probably explains why it is hard to believe that the Angry Birds franchise is ten years old. During this decade, game developer Rovio would muse about becoming the next Disney as images of the foul fowl were found on things like Band-Aids to board games and children's attire. A pair of movies were released and a theme park opened in China back in 2011.

Angry Birds 2 performed well during the first quarter

Has the coronavirus brought about a second wave of Angry Birds fans? Rovio today reported a 75% hike in first-quarter profit to $14.1 million despite a 6% drop in revenue to $72.3 million. In a statement, Rovio Chief Executive Kati Levoranta gave the reasons for the sharp hike in profits. "The high operating profit of the quarter was driven by the low level of user acquisition and the stability of our key games, especially Angry Birds 2. We introduced a series of updates for Angry Birds 2, Angry Birds Dream Blast, and Sugar Blast that were well received by the players. As a result, the performance of these games improved gradually during the quarter." During the three months from January through March, games revenue declined 5% to $66.3 million.

Rovio sees Angry Birds Dream Blast continuing to grow thanks to a "strong feature roadmap focusing on improvements to long term retention and monetization" Angry Birds 2 should see updates that Rovio says will improve the performance of the game and increase engagement with core users. Revenue of Angry Birds Match, Angry Birds Friends and Angry Birds Pop is declining at a "steady slow pace." As a result, Rovio has lowered or stopped investing in acquiring new users for these three games. The trio are still receiving what Rovio calls "substantial organic downloads." An organic download is one where an app is installed on a user's phone or tablet because he or she has a high level of interest in it. Since Rovio is no longer developing these titles, the active user base and revenue for those three games is expected to decline over time.

While Rovio "scaled back" user acquisition costs during the first quarter, these costs have remained flat during the beginning of the current quarter. The company says that it is ready to increase spending when it sees the opportunity to do so, such as an improvement in the performance of live games and when it launches a new game. Rovio hopes to release one to three new titles this year. The company has three games in soft launch. These games are far along the game development process and are being tested in order to see what kind of commercial potential they have. While these titles are getting closer to a potential launch, there is no guarantee that Rovio will commercially release any of the three.

The developer said that the global pandemic is having a positive effect on its business. The company said, "In our games, we have seen an increase in the number of downloads as well as user engagement and also some uptick in revenues in March and April," Rovio said in reference to the pandemic.  During the quarter, Rovio tested some new games and plans on releasing Small Town Murders in June. According to the developer, "The game is a new IP puzzle game embedded in a narrative of mysteries."

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Licensing remained profitable even though revenues declined 15.9% year-over-year. The company says that it is talking with Netflix about the release of an Angry Birds animated series that would launch next year. Meanwhile, the company sent everyone home on March 12th because of the coronavirus outbreak although Rovio says that it is still hiring new talent.

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