5 ms·

Some people here are saying the company made big mistakes with their strategy, growing the company too fast, etc. They pulled in 400M+ of revenue out of a gam

by pasiaj 12y ago

Some people here are saying the company made big mistakes with their strategy, growing the company too fast, etc. They pulled in 400M+ of revenue out of a game where you launch birds at piggies using a slingshot. I think they did some things right. The lifetime of a company has been getting shorter and shorter for centuries. Mobile applications, games especially, are the new extreme in that development. These companies have a very limited lifetime. It is only natural that companies in this industry expand rapidly, face the limits of their growth, and then start shrinking. The idea of lifetime employment is long gone. After Rovio dies, theres a Supercell or a Mahjong spewing up somewhere else.

ebbv 12y ago
> The lifetime of a company has been getting shorter and shorter for centuries. Really? Because Apple was founded in 1976 and I'm guessing they aren't going anywhere. Google was founded in 1998 and I don't think they're going anywhere. Your assertion is really flimsy, and I think based on seeing a large number of mismanaged companies that flare up and die quickly and then concluding this is normal or even unavoidable. While it may be common, that doesn't mean it's what has to happen. Rovio took their success and drove it into the ground. They absolutely saturated the market, coming out with new Angry Birds games and tie ins almost constantly and flooding store shelves with very low quality (and in my area, often dingy) plush animals, further lowering public perception of their brand. I'd argue that if Rovio had been more judicious with their successful IP, that public interest in it wouldn't have disappeared so completely. You seem to be arguing that the fade was unavoidable since Angry Birds is just a game where you launch birds at pigs with a sling shot. But that doesn't mean the follow up games needed to be. Super Mario Bros was just a game where a guy jumps on things. Now I'm not really saying that Angry Birds was necessarily an IP with as much legs as Mario, but I think they burned it down. Rovio chose the short term, maximum immediate profit path, and now we're seeing the result of that. Zynga did the same thing. When you go all in immediately, and don't think about what is best for your long term, you burn out public interest in whatever you have to offer. When you don't take the time to make what you're putting out compelling, people will start to conclude everything you have to offer is just going to be more of the same. And they'll be sick of it. This is not the only path available, and asserting that it is just the way things are now is ridiculous.
- lamuerteflaca 12y ago
  I'm a game developer. I'm not sure what I would do if I were to have a huge success. You speak as if it was obvious what they were supposed to have done. I'm not trying to be a smart ass. I would really like to know what you think Rovio should have done. Hopefully with your advise I'll know what to do if I ever have such a huge success.
  - ebbv 12y ago
    > I'm not trying to be a smart ass. I would really like to know what you think Rovio should have done. Hopefully with your advise I'll know what to do if I ever have such a huge success. Yes you are trying to be a smart ass. But you're wielding sarcasm like a 5 year old with a chainsaw. I already outlined what they should have done; not flood the market with sub-standard crap until everyone's sick of them. Pretty obvious if you're not blinded by greed.
    - hnnewguy 12y ago
      >I already outlined what they should have done And what sort of authority are you? How many multi-hundred-million-dollar companies have you run that you make it sound so easy and obvious?
      - ebbv 12y ago
        You realize that's the weakest argument in the world? "Only CEOs of hundred million dollar companies are allowed to weigh in." I'm not forcing you to read my opinion, if you don't like it, move on.
    - lamuerteflaca 12y ago
      It wasn't sarcasm. I've been working on a game for four years already and I'm just thinking on what if's.
  - jfoutz 12y ago
    What a problem to have, right? I think it boils down to, they're a company that is very good at making games. From a casual outside observer's point of view, they seemed to think they could jump straight into being very good at animation and merchandising. They made, what, 30 or 40 games before angry birds was a hit? They didn't seem to have the same level of commitment to 30 or 40 iterations of animation, or merchandising. It's fine to expand into new markets, companies do it all the time. You probably don't want to bet the farm on something you're not very very good at though, unless it's threatening your survival. Western union moving from the telegraph to money transfer is a pretty iconic example. Compare to Mojang (survivor bias warning...) they're still pretty small. I haven't played it, but Scrolls is supposed to be really fun. Haven't heard anything bad about Cobalt either. I was very excited for x10k or whatever the space programming game was. They did a ton of merchandising, but they didn't do it in house (as far as i can tell). They took the check from lego and let the big toy maker do their thing. Do what you think is best, but even if there's some non-game thing that makes sense, ask yourself if you really want to go head to head with Hasbro or Pixar. Really understand what you're getting yourself into.
dwild 12y ago
Success can't only be based on revenue. They took bad decision, they didn't diversify, they are responsible of this failure. How can we call massive layoff success... if you reached that point it's because of mistakes, not success.
- tim333 12y ago
  >How can we call massive layoff success... Dunno it it's 'success' but it may be sensible management. Things like Angry Birds are always going to be boom and bust. Hiring when there's lots of cash and laying off when there isn't may be kind of sensible. Though banking the money and not hiring loads of people may have been better. [edit] Reading up a bit they are less one hit wonder than you might think. Mikael and Niklas Hed, the guys who set up and have mostly run Rovio were designing and coding games since they were 12, and after founding the company in 2004 produced 51 games before Angry Birds. The company went from startup to 50 employees and then back to 12 by 2009 when they hit hard times. Post Birds they have gone to 800 employees and now I guess down to 700. They still made $37m profit in their last reported year (2013).
- nyrulez 12y ago
  Having a one hit wonder is success. Forming a company around it to milk that brand is also a good strategy. But it would be naive to think every one hit wonder can be converted to a long term business strategy. Some can and some can't. But its just more difficult. You can't blame every company that fails for that - its the nature of the business.
edgarallenbro 12y ago
>Rovio's expansion into animation and merchandising continued to hit its profits hard, leading to today's 110 redundancies. I wouldn't say they grew the company too fast. I can definitely see why merchandising would have been a huge hit on profits. With the amount of angry birds garbage I saw in stores in my area, compared against the number of people that would possibly want said garbage, well...it was just a waste of money. It's like some old executive thought it would be a great idea to expand into merchandising, as if this were still the 80s or 90s where people bought rooms full of that kind of useful shit. Anyone who has looked at the income inequality mountain that has appeared since then knows that the people who would buy that kind of crap can't afford to. Though, it doesn't surprise me that the kind of executive who would be able to make a decision like expanding into merchandising would be upper class and completely out of touch with how little people want their garbage and would have seen it as a complete waste of money.
- asnyder 12y ago
  I've seen some of my friends' kids rooms filled with angry bird dolls, stickers, and more. So there was definitely a market for it.
dredmorbius 12y ago
"The lifetime of a company has been getting shorter and shorter for centuries." Um: the concept of a joint-stock corporation is a recent phenomenon, for the most part. Though the concept dates back to 1250 and Société des Moulins du Bazacle (a milling company), for the most part they're a creation of the Industrial Revolution, dating to 1800, and until the late 19th century, companies were of limited scope and lifetime in many areas, including the United States. What has been happening over the course of the 20th century is that various measures of corporate performance, vitality, and stability have been declining, among them the residence time of companies on measures such as the Dow 30 Industrials (the "Dow Jones Average"), Fortune 500, and similar indices. That's accelerated notably since the 1960s, as referenced in Deloitte and Touche's "Center for the Edge" study "The Shift Index". http://www.reddit.com/r/dredmorbius/comments/1y3z3n/the_shift_index_declining_roic_1965_2009_forbes/ http://www.reddit.com/r/dredmorbius/comments/1y3z3n/the_shif... http://www.forbes.com/sites/stevedenning/2012/01/25/shift-index-2011-the-most-important-business-study-ever/ http://www.forbes.com/sites/stevedenning/2012/01/25/shift-in... Speaking of a decline over "centuries" really isn't appropriate due to the tremendously changed nature of firms over this period.
- dragonwriter 12y ago
  > "The lifetime of a company has been getting shorter and shorter for centuries." > Um: the concept of a joint-stock corporation is a recent phenomenon, for the most part. "Company" is a far more general term than "joint-stock corporation"; they are not even approximately equivalent. Its true that joint-stock corporations as a common form of structuring a company is a fairly recent phenomenon, but generalities about companies aren't limited to the period where joint-stock corporations were a common way of organizing them.
  - dredmorbius 12y ago
    The discussion concerned Apple and Rovio. Both are joint-stock companies. Rather than discuss what you aren't talking about, how about if you describe what you do have in mind, and the form(s) of corporate structure involved, and what time periods. I think you'll still find that prior to the Industrial Revolution, there were relatively few companies of any significant description. Sole proprietorships and the like, and a very few royal charters. 90% of all production was directly agricultural.

by pasiaj 12y ago

ebbv 12y ago

> The lifetime of a company has been getting shorter and shorter for centuries. Really? Because Apple was founded in 1976 and I'm guessing they aren't going anywhere. Google was founded in 1998 and I don't think they're going anywhere. Your assertion is really flimsy, and I think based on seeing a large number of mismanaged companies that flare up and die quickly and then concluding this is normal or even unavoidable. While it may be common, that doesn't mean it's what has to happen. Rovio took their success and drove it into the ground. They absolutely saturated the market, coming out with new Angry Birds games and tie ins almost constantly and flooding store shelves with very low quality (and in my area, often dingy) plush animals, further lowering public perception of their brand. I'd argue that if Rovio had been more judicious with their successful IP, that public interest in it wouldn't have disappeared so completely. You seem to be arguing that the fade was unavoidable since Angry Birds is just a game where you launch birds at pigs with a sling shot. But that doesn't mean the follow up games needed to be. Super Mario Bros was just a game where a guy jumps on things. Now I'm not really saying that Angry Birds was necessarily an IP with as much legs as Mario, but I think they burned it down. Rovio chose the short term, maximum immediate profit path, and now we're seeing the result of that. Zynga did the same thing. When you go all in immediately, and don't think about what is best for your long term, you burn out public interest in whatever you have to offer. When you don't take the time to make what you're putting out compelling, people will start to conclude everything you have to offer is just going to be more of the same. And they'll be sick of it. This is not the only path available, and asserting that it is just the way things are now is ridiculous.

lamuerteflaca 12y ago
I'm a game developer. I'm not sure what I would do if I were to have a huge success. You speak as if it was obvious what they were supposed to have done. I'm not trying to be a smart ass. I would really like to know what you think Rovio should have done. Hopefully with your advise I'll know what to do if I ever have such a huge success.
- ebbv 12y ago
  > I'm not trying to be a smart ass. I would really like to know what you think Rovio should have done. Hopefully with your advise I'll know what to do if I ever have such a huge success. Yes you are trying to be a smart ass. But you're wielding sarcasm like a 5 year old with a chainsaw. I already outlined what they should have done; not flood the market with sub-standard crap until everyone's sick of them. Pretty obvious if you're not blinded by greed.
  - hnnewguy 12y ago
    >I already outlined what they should have done And what sort of authority are you? How many multi-hundred-million-dollar companies have you run that you make it sound so easy and obvious?
    - ebbv 12y ago
      You realize that's the weakest argument in the world? "Only CEOs of hundred million dollar companies are allowed to weigh in." I'm not forcing you to read my opinion, if you don't like it, move on.
  - lamuerteflaca 12y ago
    It wasn't sarcasm. I've been working on a game for four years already and I'm just thinking on what if's.
- jfoutz 12y ago
  What a problem to have, right? I think it boils down to, they're a company that is very good at making games. From a casual outside observer's point of view, they seemed to think they could jump straight into being very good at animation and merchandising. They made, what, 30 or 40 games before angry birds was a hit? They didn't seem to have the same level of commitment to 30 or 40 iterations of animation, or merchandising. It's fine to expand into new markets, companies do it all the time. You probably don't want to bet the farm on something you're not very very good at though, unless it's threatening your survival. Western union moving from the telegraph to money transfer is a pretty iconic example. Compare to Mojang (survivor bias warning...) they're still pretty small. I haven't played it, but Scrolls is supposed to be really fun. Haven't heard anything bad about Cobalt either. I was very excited for x10k or whatever the space programming game was. They did a ton of merchandising, but they didn't do it in house (as far as i can tell). They took the check from lego and let the big toy maker do their thing. Do what you think is best, but even if there's some non-game thing that makes sense, ask yourself if you really want to go head to head with Hasbro or Pixar. Really understand what you're getting yourself into.

dwild 12y ago

Success can't only be based on revenue. They took bad decision, they didn't diversify, they are responsible of this failure. How can we call massive layoff success... if you reached that point it's because of mistakes, not success.

tim333 12y ago
>How can we call massive layoff success... Dunno it it's 'success' but it may be sensible management. Things like Angry Birds are always going to be boom and bust. Hiring when there's lots of cash and laying off when there isn't may be kind of sensible. Though banking the money and not hiring loads of people may have been better. [edit] Reading up a bit they are less one hit wonder than you might think. Mikael and Niklas Hed, the guys who set up and have mostly run Rovio were designing and coding games since they were 12, and after founding the company in 2004 produced 51 games before Angry Birds. The company went from startup to 50 employees and then back to 12 by 2009 when they hit hard times. Post Birds they have gone to 800 employees and now I guess down to 700. They still made $37m profit in their last reported year (2013).
nyrulez 12y ago
Having a one hit wonder is success. Forming a company around it to milk that brand is also a good strategy. But it would be naive to think every one hit wonder can be converted to a long term business strategy. Some can and some can't. But its just more difficult. You can't blame every company that fails for that - its the nature of the business.

edgarallenbro 12y ago

>Rovio's expansion into animation and merchandising continued to hit its profits hard, leading to today's 110 redundancies. I wouldn't say they grew the company too fast. I can definitely see why merchandising would have been a huge hit on profits. With the amount of angry birds garbage I saw in stores in my area, compared against the number of people that would possibly want said garbage, well...it was just a waste of money. It's like some old executive thought it would be a great idea to expand into merchandising, as if this were still the 80s or 90s where people bought rooms full of that kind of useful shit. Anyone who has looked at the income inequality mountain that has appeared since then knows that the people who would buy that kind of crap can't afford to. Though, it doesn't surprise me that the kind of executive who would be able to make a decision like expanding into merchandising would be upper class and completely out of touch with how little people want their garbage and would have seen it as a complete waste of money.

asnyder 12y ago
I've seen some of my friends' kids rooms filled with angry bird dolls, stickers, and more. So there was definitely a market for it.

dredmorbius 12y ago

"The lifetime of a company has been getting shorter and shorter for centuries." Um: the concept of a joint-stock corporation is a recent phenomenon, for the most part. Though the concept dates back to 1250 and Société des Moulins du Bazacle (a milling company), for the most part they're a creation of the Industrial Revolution, dating to 1800, and until the late 19th century, companies were of limited scope and lifetime in many areas, including the United States. What has been happening over the course of the 20th century is that various measures of corporate performance, vitality, and stability have been declining, among them the residence time of companies on measures such as the Dow 30 Industrials (the "Dow Jones Average"), Fortune 500, and similar indices. That's accelerated notably since the 1960s, as referenced in Deloitte and Touche's "Center for the Edge" study "The Shift Index". http://www.reddit.com/r/dredmorbius/comments/1y3z3n/the_shift_index_declining_roic_1965_2009_forbes/ http://www.reddit.com/r/dredmorbius/comments/1y3z3n/the_shif... http://www.forbes.com/sites/stevedenning/2012/01/25/shift-index-2011-the-most-important-business-study-ever/ http://www.forbes.com/sites/stevedenning/2012/01/25/shift-in... Speaking of a decline over "centuries" really isn't appropriate due to the tremendously changed nature of firms over this period.

dragonwriter 12y ago
> "The lifetime of a company has been getting shorter and shorter for centuries." > Um: the concept of a joint-stock corporation is a recent phenomenon, for the most part. "Company" is a far more general term than "joint-stock corporation"; they are not even approximately equivalent. Its true that joint-stock corporations as a common form of structuring a company is a fairly recent phenomenon, but generalities about companies aren't limited to the period where joint-stock corporations were a common way of organizing them.
- dredmorbius 12y ago
  The discussion concerned Apple and Rovio. Both are joint-stock companies. Rather than discuss what you aren't talking about, how about if you describe what you do have in mind, and the form(s) of corporate structure involved, and what time periods. I think you'll still find that prior to the Industrial Revolution, there were relatively few companies of any significant description. Sole proprietorships and the like, and a very few royal charters. 90% of all production was directly agricultural.