6 ms·

Rovio did $3 billion in revenue and is “insanely profitable”

39 points by dirtyaura 14y ago

JeffKnol 14y ago
It's reprehensible that they aren't directly funneling all profits to the creator of the Box2D framework. All they did was skin a few Box2D function calls.
- DoubleCluster 14y ago
  Yep, and they did it brilliantly and then promoted and sold it brilliantly. Technical stuff isn't worth that much money on its own.
  - sharemywin 14y ago
    I think alot of that revenue was from toys and stuff too.
- atonse 14y ago
  My apologies if you're joking or being sarcastic and I didn't detect it. I suppose if that's "all they did" - any of us who could do that could've been sitting on that 3 billion, right? Heck, even the Box2D guys could've done it. There's a small difference in saying "they should've employed the Box2D guys" or "generously funded the project" and "they should funnel all profits" - perhaps Rovio deserves some credit here for turning a little casual iPhone game into a household name.
  - seanmcdirmid 14y ago
    Parent should really adhere to Poe's law of internet trolling.
- TillE 14y ago
  Heh. It is a lovely example of a game that's almost entirely about the polish, with relatively little substance. Why was Crush The Castle not as successful? Marketing and polish. If your aim is commercial success, it's obvious what your focus has to be.
- dj2stein9 14y ago
  You should talk to the author of GORILLAS.BAS
- S_A_P 14y ago
  Why are they not funneling all the profits into the creator of iOS, Android, Windows Phone, Webkit, and all number of other frameworks. The app wouldn't run with out them. Rovio made the effort to market and capture the imaginations of people so that they want to spend money on the games, toys and t-shirts. This reminds me of pac-man from when I was a kid. I had a Pac-man birthday cake, Pac-Man clothes, Pac-Man Underroos, etc. I know my 5 year old son is obsessed with the angry birds as characters, and wants to know their back story. This is what drives him, not the framework used.
rafweverbergh 14y ago
Thanks for posting, dirtyaura (I wrote the article). Rovio is insanely good at keeping that Angry Birds brand relevant, but I do wonder whether they're too dependent on that one brand. (Armchair business strategist much, lol?)
- dirtyaura 14y ago
  Sure, they are a one brand company. It is their Achilles' heel, but I think it doesn't mean that they can't continue their trajectory for a few more years. A rather comparable case of Hello Kitty has been milking billions per year since early 2000s.
  - rafweverbergh 14y ago
    Good point.
  - mikedmiked 14y ago
    > continue their trajectory Nice.
  - vardump 14y ago
    Hopefully they have more products too, just in case current trajectory crashes into some obstacle destabilizing it.
- vilpponen 14y ago
  Good story, however I'd like to ask if Vesterbacka made any clearer statements on what "managing revenue" means. Their 2011 filing for the Finnish officials state they made about 75 million euros in revenue (far from the $500 million cited in the article). Does this number represent the value of the merchandise sales of the company or was he explicitly referring to the revenue of Rovio itself? Edit: here's the link to the Finnish officials' records http://finder.fi/Televiestintälaitteita%20ja%20palveluja/Rovio%20Entertainment%20Oy/ESPOO/taloustiedot/1176759 http://finder.fi/Televiestintälaitteita%20ja%20palveluja/Rov...
  - 14y ago
rafweverbergh 14y ago
In other news, you guys crashed the server. It will be up again soon.
mbesto 14y ago
I genuinely like that Rovio is making good money, however it's this type of hyperbolic growth that is (1) not realistically reproducible and (2) makes people think that it's reproducible. In other words, an outlier. It once again reinstates the idea that the general public thinks this stuff is built over night and an app can be made with $10k. This is not an knock on the author, but I think a more thorough report on the years of poor growth Rovio experienced is much more enjoyable and realistic to read. I can't find it right now, but I believe the Atlantic wrote something just like that. Edit: I should probably clarify, I actually think the bigger issue I have is that the graph is particularly disingenuous, the "hockey stick growth" should follow the company from when they were founded in 2003...10 years ago. It may actually like more like a traditional hockey stick.
- bergie 14y ago
  Yep, I've heard that they made dozens of games before Angry Birds took off. I would like to think that this shows the sort of long-term view the government R&D grants can give you. Which VC would let you continue after, say, ten failed products? note: I have no info on whether this is the case for Rovio, but I know the government has been trying to support / set up the Finnish game industry cluster for around ten years, and now with Rovio and Supercell that is finally starting to pay off.
  - frogpelt 14y ago
    Surely you aren't suggesting that the government should fund game developer R&D. Forcing the general public to fund bringing your ideas to fruition is a completely unsustainable economic model. Governments all over the world are flat broke from this type of thinking.
    - bergie 14y ago
      Governments can think a bit further ahead than typical venture capitalists... it is not about making an exit year from now, but instead ensuring that there is enough tax revenue coming in when the current generation of workers retires. In Finland the current focus is ensuring that the economy can transition from the failing mobile phones and shipyards to something else, and the game cluster is a part of that. Update: found an article about the role public funding played with Rovio's success: Rovio Ltd. has benefited from support schemes by Tekes, the Finnish Funding Agency for Technology and Innovation. According to the public information provided by Tekes, the company received grants of € 379,510 over the years 2005-2007. In addition, the Finnish Film Foundation, an institution backed by the state, has granted Rovio Ltd. € 50,000 of support for the production of an Angry Birds animation movie. Already before, Rovio had announced cooperations for producing “Angry Bird” films, including a cooperation with 20th Century Fox. http://www.proinno-europe.eu/inno-grips-ii/newsroom/finnish-success-story-angry-birds http://www.proinno-europe.eu/inno-grips-ii/newsroom/finnish-...
zura 14y ago
I think Rovio and other similar (and similarly successful) game publishers owe at least one Ferrari to the Box2D author :)
- dougk16 14y ago
  Seriously...Erin Catto would be a millionare with even the most minimal of pricing structures for using Box2D, assuming another open source engine didn't come to take its place.
- dpiers 14y ago
  One of my favorite moments of GDC 2011 came during the Q&A session of a talk by Rovio about Angry Birds: Q: “Hi Peter, could you tell me which physics engine Angy Birds uses?” Peter (Rovio): “Box2D” Q: “Great. Would you consider giving credit to Box2D in your game?” Peter (Rovio): “Yes, of course” Q: “Thank you! By the way, I am Erin Catto the creator of Box2D” Peter (Rovio): “Great! I would like to talk to you after the session”
- paulhauggis 14y ago
  Should all of the startups on HN owe the creators of PHP, rails, python, and every other framework a Ferrari too?
  - coldtea 14y ago
    >Should all of the startups on HN owe the creators of PHP, rails, python, and every other framework a Ferrari too? If they are successful and the rely on those programs, sure, why not? That's how you get more support for Open Source software, and more funds for projects that benefit everyone. OSS was moving faster at the late nineties-early 2000s, when huge companies employed tons of people to work on the Linux kernel, libs, frameworks, the desktop, etc, that it does now.
    - bergie 14y ago
      It may be a cause or effect of this, but the open source culture has fractured in the 2000s to many smaller projects or libraries instead of these huge mega-projects (say Linux, GNOME, KDE, Mozilla, OpenOffice) that mostly come from the 90s.
JamesArgo 14y ago
Which games take off is not super correlated with quality; I would argue that Angry Birds is above average, but not exceptional. The whole "hit" phenomenon is highly dependent on initial conditions, a sort of semi-random positive feedback loop. When building a game, one's idea of success should be the cultivation of a dedicated audience large enough to sustain your business. Counting phantom billions will lead to terrible design decisions, usually imitating random aspects of successful projects, like some statistically-illiterate lotto player diligently searching for patterns in previous winning numbers.
dirtyaura 14y ago
As I originally posted this to HN, I must say that the claims in the article don't hold on closer inspection. I shared it too quickly without checking facts and thinking it through, shame on me on spreading misinformation. Good commentary about the claims: http://bgr.com/2013/02/11/rovio-revenue-debunk-324583/ http://bgr.com/2013/02/11/rovio-revenue-debunk-324583/
- rafweverbergh 14y ago
  As the author of the article, I share your concerns. I asked Vesterbacka for comments when I posted the first version, but he only responded later this afternoon. (I'm now waiting for feedback from the Marketwatch/WSJ reporter where the claims originated). If you've followed the post, you'll see that I updated it regularly in the course of the day with information from this thread, with a window of a few hours where unfortunately I couldn't update the post because the site went down.

39 points by dirtyaura 14y ago

It's reprehensible that they aren't directly funneling all profits to the creator of the Box2D framework. All they did was skin a few Box2D function calls.

DoubleCluster 14y ago
Yep, and they did it brilliantly and then promoted and sold it brilliantly. Technical stuff isn't worth that much money on its own.
- sharemywin 14y ago
  I think alot of that revenue was from toys and stuff too.
atonse 14y ago
My apologies if you're joking or being sarcastic and I didn't detect it. I suppose if that's "all they did" - any of us who could do that could've been sitting on that 3 billion, right? Heck, even the Box2D guys could've done it. There's a small difference in saying "they should've employed the Box2D guys" or "generously funded the project" and "they should funnel all profits" - perhaps Rovio deserves some credit here for turning a little casual iPhone game into a household name.
- seanmcdirmid 14y ago
  Parent should really adhere to Poe's law of internet trolling.
TillE 14y ago
Heh. It is a lovely example of a game that's almost entirely about the polish, with relatively little substance. Why was Crush The Castle not as successful? Marketing and polish. If your aim is commercial success, it's obvious what your focus has to be.
dj2stein9 14y ago
You should talk to the author of GORILLAS.BAS
S_A_P 14y ago
Why are they not funneling all the profits into the creator of iOS, Android, Windows Phone, Webkit, and all number of other frameworks. The app wouldn't run with out them. Rovio made the effort to market and capture the imaginations of people so that they want to spend money on the games, toys and t-shirts. This reminds me of pac-man from when I was a kid. I had a Pac-man birthday cake, Pac-Man clothes, Pac-Man Underroos, etc. I know my 5 year old son is obsessed with the angry birds as characters, and wants to know their back story. This is what drives him, not the framework used.

rafweverbergh 14y ago

Thanks for posting, dirtyaura (I wrote the article). Rovio is insanely good at keeping that Angry Birds brand relevant, but I do wonder whether they're too dependent on that one brand. (Armchair business strategist much, lol?)

dirtyaura 14y ago
Sure, they are a one brand company. It is their Achilles' heel, but I think it doesn't mean that they can't continue their trajectory for a few more years. A rather comparable case of Hello Kitty has been milking billions per year since early 2000s.
- rafweverbergh 14y ago
  Good point.
- mikedmiked 14y ago
  > continue their trajectory Nice.
- vardump 14y ago
  Hopefully they have more products too, just in case current trajectory crashes into some obstacle destabilizing it.
vilpponen 14y ago
Good story, however I'd like to ask if Vesterbacka made any clearer statements on what "managing revenue" means. Their 2011 filing for the Finnish officials state they made about 75 million euros in revenue (far from the $500 million cited in the article). Does this number represent the value of the merchandise sales of the company or was he explicitly referring to the revenue of Rovio itself? Edit: here's the link to the Finnish officials' records http://finder.fi/Televiestintälaitteita%20ja%20palveluja/Rovio%20Entertainment%20Oy/ESPOO/taloustiedot/1176759 http://finder.fi/Televiestintälaitteita%20ja%20palveluja/Rov...
- 14y ago

rafweverbergh 14y ago

In other news, you guys crashed the server. It will be up again soon.

mbesto 14y ago

I genuinely like that Rovio is making good money, however it's this type of hyperbolic growth that is (1) not realistically reproducible and (2) makes people think that it's reproducible. In other words, an outlier. It once again reinstates the idea that the general public thinks this stuff is built over night and an app can be made with $10k. This is not an knock on the author, but I think a more thorough report on the years of poor growth Rovio experienced is much more enjoyable and realistic to read. I can't find it right now, but I believe the Atlantic wrote something just like that. Edit: I should probably clarify, I actually think the bigger issue I have is that the graph is particularly disingenuous, the "hockey stick growth" should follow the company from when they were founded in 2003...10 years ago. It may actually like more like a traditional hockey stick.

bergie 14y ago
Yep, I've heard that they made dozens of games before Angry Birds took off. I would like to think that this shows the sort of long-term view the government R&D grants can give you. Which VC would let you continue after, say, ten failed products? note: I have no info on whether this is the case for Rovio, but I know the government has been trying to support / set up the Finnish game industry cluster for around ten years, and now with Rovio and Supercell that is finally starting to pay off.
- frogpelt 14y ago
  Surely you aren't suggesting that the government should fund game developer R&D. Forcing the general public to fund bringing your ideas to fruition is a completely unsustainable economic model. Governments all over the world are flat broke from this type of thinking.
  - bergie 14y ago
    Governments can think a bit further ahead than typical venture capitalists... it is not about making an exit year from now, but instead ensuring that there is enough tax revenue coming in when the current generation of workers retires. In Finland the current focus is ensuring that the economy can transition from the failing mobile phones and shipyards to something else, and the game cluster is a part of that. Update: found an article about the role public funding played with Rovio's success: Rovio Ltd. has benefited from support schemes by Tekes, the Finnish Funding Agency for Technology and Innovation. According to the public information provided by Tekes, the company received grants of € 379,510 over the years 2005-2007. In addition, the Finnish Film Foundation, an institution backed by the state, has granted Rovio Ltd. € 50,000 of support for the production of an Angry Birds animation movie. Already before, Rovio had announced cooperations for producing “Angry Bird” films, including a cooperation with 20th Century Fox. http://www.proinno-europe.eu/inno-grips-ii/newsroom/finnish-success-story-angry-birds http://www.proinno-europe.eu/inno-grips-ii/newsroom/finnish-...

zura 14y ago

I think Rovio and other similar (and similarly successful) game publishers owe at least one Ferrari to the Box2D author :)

dougk16 14y ago
Seriously...Erin Catto would be a millionare with even the most minimal of pricing structures for using Box2D, assuming another open source engine didn't come to take its place.
dpiers 14y ago
One of my favorite moments of GDC 2011 came during the Q&A session of a talk by Rovio about Angry Birds: Q: “Hi Peter, could you tell me which physics engine Angy Birds uses?” Peter (Rovio): “Box2D” Q: “Great. Would you consider giving credit to Box2D in your game?” Peter (Rovio): “Yes, of course” Q: “Thank you! By the way, I am Erin Catto the creator of Box2D” Peter (Rovio): “Great! I would like to talk to you after the session”
paulhauggis 14y ago
Should all of the startups on HN owe the creators of PHP, rails, python, and every other framework a Ferrari too?
- coldtea 14y ago
  >Should all of the startups on HN owe the creators of PHP, rails, python, and every other framework a Ferrari too? If they are successful and the rely on those programs, sure, why not? That's how you get more support for Open Source software, and more funds for projects that benefit everyone. OSS was moving faster at the late nineties-early 2000s, when huge companies employed tons of people to work on the Linux kernel, libs, frameworks, the desktop, etc, that it does now.
  - bergie 14y ago
    It may be a cause or effect of this, but the open source culture has fractured in the 2000s to many smaller projects or libraries instead of these huge mega-projects (say Linux, GNOME, KDE, Mozilla, OpenOffice) that mostly come from the 90s.

JamesArgo 14y ago

Which games take off is not super correlated with quality; I would argue that Angry Birds is above average, but not exceptional. The whole "hit" phenomenon is highly dependent on initial conditions, a sort of semi-random positive feedback loop. When building a game, one's idea of success should be the cultivation of a dedicated audience large enough to sustain your business. Counting phantom billions will lead to terrible design decisions, usually imitating random aspects of successful projects, like some statistically-illiterate lotto player diligently searching for patterns in previous winning numbers.

dirtyaura 14y ago

As I originally posted this to HN, I must say that the claims in the article don't hold on closer inspection. I shared it too quickly without checking facts and thinking it through, shame on me on spreading misinformation. Good commentary about the claims: http://bgr.com/2013/02/11/rovio-revenue-debunk-324583/ http://bgr.com/2013/02/11/rovio-revenue-debunk-324583/

rafweverbergh 14y ago
As the author of the article, I share your concerns. I asked Vesterbacka for comments when I posted the first version, but he only responded later this afternoon. (I'm now waiting for feedback from the Marketwatch/WSJ reporter where the claims originated). If you've followed the post, you'll see that I updated it regularly in the course of the day with information from this thread, with a window of a few hours where unfortunately I couldn't update the post because the site went down.