Fixing Rovio’s broken wings

The last two years have been rough for Rovio.

Two CEOs – Mikael Hed and Pekka Rantala – stepped down, hundreds of staff were laid off, studios were closed and the firm’s financials have not made for pleasant reading.

It’s been a worrying decline for the company that has openly said it wants to rival Disney, but executive vice president for games Wilhelm Taht believes the worst has passed.

“The past two years were, as everyone knows, not without challenges,” he tells Develop, his pink Angry Birds hoodie as much a declaration of pride in Rovio’s flagship brand as it is a fashion statement.

“There’s no denying we went through a change and, unfortunately, that meant we discontinued certain businesses that had scaled up in the past and laid off a number of people.

“As Angry Birds released and grew quite big, we changed our position and focus from being a games company to being an entertainment company. All the while, the market shifted from a premium business model to free-to-play – and we were a little slow to respond.”

A 100 per cent skill-based gamer is difficult to bring into free-to-play. That’s something we’ve worked very hard on for Angry Birds 2 – and it’s done really well.

Towards the tail end of 2015, Rovio sought to rectify this with a major restructure that would see the entire company split into two business units: games and media. Taht maintains that it is “a little too early” to fully divulge the new strategy, but is more than happy to share the final vision.

“The goal was to create more independence within the business units themselves,” he says. “We’re returning to a more entrepreneurial approach to conducting our business. 

“Naturally, there are mutual projects that we’re working on and we align on a number of different factors when it comes to both businesses, but we try to operate in a nimble and entrepreneurial fashion with teams that feel like they have ownership of their business.”

With this fresh hierarchy comes a new CEO: Rovio’s former chief legal officer Kati Levoranta. While reluctant to speak on her behalf, Taht says the new exec brings “focus, operational firepower and structure” to the table, as well as respect for the games and media units’ newfound independence.

“She doesn’t involve herself in commercial and business models,” Taht explains. “She lets us run our own businesses.”

The plan to bring Rovio back to its entrepreneurial roots, plus a recent move to new premises finally uniting the entire company in one building, has boosted the team’s morale and enthusiasm for the coming year.

“We want to combine genres in new ways, we want to do unexpected things with our existing IPs,” Taht enthuses. “And we have the movie coming up, which is very important for the games business.”

HIGH FLYERS

Of course the central pillar of Rovio’s business – games or otherwise – is still Angry Birds, a franchise the firm has repeatedly said it believes will last for “hundreds of years”. While the series is still only seven years old, the 65m downloads already racked up by Angry Birds 2 suggest the world has yet to tire of its slingshot-based antics.

But, as Taht observes, the industry has changed dramatically since the Birds first debuted and it proved to be a major challenge for the Rovio team.

“The original Angry Birds and its follow-ups were skill-based games through and through,” he explains. “A 100 per cent skill-based gamer is difficult to bring into free-to-play. That’s something we’ve worked very hard on for Angry Birds 2 – and it’s done really well.”

Taht adds that Rovio Games has grown in revenue since the original Angry Birds in 2009, and naturally plans to continue that growth.

“We have a few very good performers on the market right now that we’re servicing and scaling up through user acquisition, and we aim to continue that,” he says.

However, Angry Birds faces a similar issue to mobile megahits like Candy Crush and Clash of Clans: innovating while sticking to their winning formula. There’s only so many ways to fling a bird at a pig, surely?

“I’m not sure there is,” Taht laughs. “You can come up with very novel ways to mash that up with other freemium game design elements, which we have been exploring internally.”

The market shifted from a premium business model to free-to-play – and we were a little slow to respond.

HATCHING NEW BRANDS

Rovio’s future is no longer solely dependent on the Birds. The company has continued to experiment with new IP, and recent release Nibblers has shown great promise – Taht reports “phenomenal numbers” from the match-three game.

Hopes are also high for a new hit from Rovio Stars, the company’s publishing programme that Taht reminds us is “commercially successful” and “definitely still on the agenda”.

Rovio is keen to bring more developers into the fold, too.

“Our ears and eyes are open to games that studios feel could fit with our cross-promotion network,”says Taht.

“The vision is that, someday, one of our third-party collaborations will turn into something we can bring above and beyond mobile games. We’ve done trials on things like merchandising – for example, with Plunder Pirates. It wasn’t at a massive scale, but we’ve tried. It would be wonderful to bring that to new brands.”

While Taht is hopeful about Rovio’s future franchises, the hard-learned lessons of the past two years are keeping the company’s expectations in check. The firm is certainly not expecting the Angry Birds lightning to strike twice.

“If I were to say we’re going to generate tens of Angry Birds, that would be hugely arrogant,” he admits. “We hope to, of course, but we need to keep our feet on the ground and focus on creating great games, supported by new or existing IP that are really appealing to our target audience. With time, those can grow big.”

Rovio’s portfolio is not the only thing that’s growing. While hundreds of employees were laid off last year, the firm is once again on the hunt for new games development talent. This time, Taht says, it will be at a more cautious and sensible pace.

“The games business is constantly recruiting,” he says. “I urge developers to come to our recruiting site. We’re very much interested in free-to-play design and product leadership – those are two areas we’d like to find as much talent as possible in. 

“We’ve a lot of people from the UK in our offices, and we are growing, but cautiously. We’re not accelerating at the level we have before, bringing all the challenges that brought to us.”

We need to keep our feet on the ground and focus on creating great games, supported by new or existing IP that are really appealing to our target audience. With time, those can grow big.

FLOCK TOGETHER: ROVIO AND COLLABORATIONS

Rovio has never been overly guarded with the Angry Birds brand. Spin-offs such as RPG Angry Birds Epic and kart racer Angry Birds Go have been developed by third-party studios, and the firm has even secured partnerships with major franchises such as Star Wars and Transformers. Can we expect more crossovers in future?

“There’s certainly a few brands out there we’d love to collaborate with,” Rovio’s Wilhelm Taht tells Develop. “We have nothing to share at this moment, but this is always an area that we have felt strongly about and we’re naturally keeping our eyes open.

“The collaborations we did with Star Wars and Transformers are loved amongst the fans, and it’s been a really interesting way to work with other developers.”

Taht believes the mobile games market has now entered “the partnership era” – but what does that even mean? 

“It means we need to keep having a healthy mix of internal and external development,” he explains. “We at Rovio do not know everything – there’s certainly areas of skills that we don’t have, but have plans on building up internally. So partnering with great studios is something that is close to our hearts. 

“We love some of the ideas we get and we’re discussing some of them with studios across the globe. Some of the collaborations that we’ve seen studios so far have in fact started in a really simple way: we meet somebody at a show, or we exchange a few emails and there’s a spark that becomes a game that reaches potentially hundreds of millions of users.”

Article originally published in Develop: March 2016 issue.