Rovio to Cut 260 Jobs as the Angry Birds Franchise Becomes Irrelevant

Unfortunately the market doesn't support selling a premium game at prices that allow anyone other than a small studio to keep the lights on.

We've been in the game since the beginning so I've seen the transition from selling a game at $4.99, then $2.99, then $0.99, and finally free with IAP. Despite being very successful we didn't enjoy that trend, but instead just adapted to it.

It's purely a response to the mobile consumer's spending habits and their complete unwillingness to psychologically accept the "risk" that the $5 or $2 game they bought might not be as fun as they hoped.

Ugh. Greedy idiots are ruining mobile gaming. There are virtually no good games anymore as they all are designed to require in app purchases, they are not designed to be great games, just to con stupid people out of money. Gaming on mobile is dead because of this, yet continues to make money due to such scams.

The scoring system also makes absolutely no sense and removes any incentives to pay attention to the leaderboard

Forcing the player to wait (or pay if they don't want to wait) has been proven to work well over and over again by numerous games.

Angry Birds 2 felt like the exact same game to me with new birds and scenery maybe. I couldn't figure out how they could pull this IAP nonsense - especially when so many other versions of their games are out there for free, most of which I haven't finished 10%.

If I feel the need to sling a bird, I'm sure there are plenty of levels I haven't tried yet that I can still play for free in other versions.

I couldn't wrap my brain around what their strategy might be for this new game.

I too would prefer that, but games like that just don't sell. Selling mobile games are hard enough in the first place (unless you can get into the top 10) because you are forced to sell at 0.99, which barely covers your expenses, but you also have to fight all the free games out there (only so much attention is available).

Essentially this is the only way to have a shot at making money in the mobile games market.

Even so, Angry Birds 2 has a level of polish that makes the original look like some indie side project. If there's such thing as a AAA casual game, this is it.

Which really shows how sad this business is -- a true sequel to a smash hit that goes way beyond the original sells so poorly that it leads to mass layoffs.

Interesting that you mention Star Wars, because it's one of the few franchises that has been able to continually reinvent itself over the years, while raking it in from various video games, comic books, furniture etc.

Angry Birds tried to do the same. A few years ago you couldn't walk past a park or school without seeing a kid in an Angry Birds shirt or carrying one of those goody stuffed pigs. Only problem is that they milked the franchise without letting it evolve, or invest the profits in other opportunities (they tried, but how can you go from mega-hit to fresh start and hit the same lightning rod twice?). Just like that tacky wall-mounted singing fish, Angry Birds had a typical product lifetime, and Rovio should have expected their one trick pony to obey the currents of time.

They also tried publishing different games, Amazing Alex for example. The truth is, for such simple things and for this definition of "success" (i.e. being the global hit of the moment) there is no formula.

For a comparison, look at King, what success do they have outside of candy crush? And it's not for the lack of games as they have quite a few.

It's the same thing Nintendo does with Mario.

Absolutely cash out. Internet fame and popularity is fleeting. Building up 800 employees because of one hit is a huge gamble. You could get another hit... but better odds are that you are just throwing money down the drain. Be happy for what you have, monetize the crap out of it, sell it at the peak if possible, and let it go.

The thing that indie devs don't recognize about gaming is that it's a hits business, just like film and music. _Success of your franchise is not an endorsement_. People consume hits and toss them away for the next big thing all the time. The reasons independent game companies make these mistakes is that they conflate the mass appeal of their creation with a personal endorsement and assume anything they do in the future will be well-received. That's rarely the case.

To be a successful player in the hits business, you have to be putting out new, formulaic stuff constantly, aware that some percentage of it will never make back its money, some may break even, and some will make a lot of money. This is what movie studios, record companies, and the successful game conglomerates do. As much as it may get tiresome to see the bi-annual CoD release break records, it matches the expected behavior perfectly.

But I digress. The direct answer to your question is pretty similar to what it always is: don't grow too fast, don't let it go to your head, and diversify. Personally, if I was in that situation, I think selling out to Activision or EA, who already have a functional hits apparatus, would be a path warranting serious consideration. A lot of game developers are eventually forced into that position anyway after they make the erroneous assumptions discussed in this comment and become financially distressed.

Depends on what you want in life, personally I'm a big fan of develop enough capital to give yourself infinite 'runway' as an engineer (basically enough of an endowment to provide for your living expenses, your family obligations, and stuff to develop new things.) But that is me, I'd be happy spending my time building and programming gizmos while looking for commercial opportunities for the same. Ultimately its a fairly selfish target since in that model I'm not changing the world for the betterment of mankind and my social impact is limited to people I help along the way. And it has a safety aspect to it which is "make sure me and mine will be ok, then look to improving the rest of the world." but it is actionable and fairly straight forward to define as a target.

So then you have people like Elon Musk who have pretty much everything they could ever want, and they risk it all to start an electric car company. I have a huge amount of respect for his willingness to do that, I don't believe I would be able to. Of course in the 'excess success' category I would be putting that excess capital to work in things.

I believe the makers of Draw Something won this game. Sold right at the peak of popularity then faded to relative obscurity within a few months.

Stay small enough that you can use those resources to maintain an indefinite runway.

To me a windfall like that means you get to remove poisonous elements from the game development process. Namely marketing and business concerns, which tend to warp game design. For example, you would never introduce an artificial energy mechanic in a game that you made for yourself.

Now you can focus purely on making a great GAME. Everything that goes into it can be in service of making it a better experience. Which I believe also happens to be the best strategy to making a successful game.

I think it requires awareness about how deep the value of your product goes. E.g. I knew the creators of a very popular cable show (Queer Eye for the Straight Guy) and despite surprising overnight mainstream success they were remarkably clear-eyed about how long the phenomenon was likely to last and how to exploit it over that time period. Other shows in related genres like Top Chef or Project Runway were capable of a longer life because their premises inherently support a richer variety of stories. Both kinds of properties can be valuable.

Angry Birds is predicated on a great, clever irony: fuzzy, harmless-looking creatures with facial expressions and behavior of furious vengeance. But it doesn't seem like there's a lot of deeper/substantive places to go with that: a single emotional register is quite limiting for storytelling.

The odd thing is that Rovio's actions are a mix of rapid exploitation (all the brand-sapping tie-ins, not embedding the birds in a bigger 'universe') and enterprise building (huge headcount, freemium model).

Games is a hit driven industry and it is incredibly hard to predict what will become a hit. Incredibly great games can underperform for a variety of reasons. Even a bad release date could really hurt a title.

If one were to attempt to build a larger game company out of a single hit, one would have to create a company that would have a lot of variety of projects and that would be able to weather certain titles bombing. In practice it seems that this is incredibly difficult, as over the years the number of big game studios has steadily shrunk.

I think Notch is one of the few to handle this well. He supports other indie devs that look promising rather than trying to bottle the lightning a second time.

Either you accept that this is a hit-based business, take the money and run.

... or you do what Rovio did and try to branch out beyond games and build a larger brand out of it.

That's probably easier than trying to find the next hit (see how that went for Zynga or how its currently going for King)

The thing I don't understand about making something larger is that you're ruining the circumstances of your original success. Not say that you were definitely successful because you had a small team, but I don't see any evidence that having a bigger team makes you more likely to produce a hit.

As other have said, I'd cash out and get to working on the next game. Of course, that's all very well for me, Mr. Fictional Founder - my employees might have other opinions.

Look at it this way - the guys making this decision probably end up with more money than they could possibly hope to spend either way (just stash away a couple dozen $MM).

Might as well take the risk of trying to build an empire?

It always surprised me that these people treat their mobile game studio as a going concern when this business has all the features of the lottery where you enter repeatedly till you win big and when you do you get the cash and take off with no more time and money spent on buying lottery tickets and "optimizing" your chances to win.

I guess this could be attributable to the gambler mentality where they believe that the fact of past winnings is indicative of more and bigger winnings in the future but I think that AB were rather prudent albeit rather late that they cut their losses and laid off people to buy them some time.

Will they get out before it's too late? This remains to be seen.

This is very important. I would also argue that Rovio never really achieved the "Freemium ideal" in the way that top grossing games: Clash of Clans, Game of War, and Candy Crush has.

Now are other examples in the reverse, where the game is far too expensive to attract a large userbase.

But Rovio hasn't been able to "toe the line" between an attractive "free-to-wait" game that is fun enough to draw in massive amounts of paying users - like other developers have - _despite_ having a brand marketable enough to make a movie off of.

Not really, the article quite clearly says "... and its freemium model doesn’t seem to be working great."

At the end the article mentions the game wasn't designed with the current freemium model in mind (since the first iteration was pay-to-install), maybe that threw you off?

That was my initial response to The LEGO Movie, which wound up being one of the best movies of the year. It'll all depend on the team behind it.

Kids, that's why.

Hubris, mostly.

> Facebook for a website..

That might be the greatest understatement I've seen for a while.

It's technically true but it really doesn't paint any kind of picture.

Facebook is a website in the same way that the Library of Congress is a 'place that stores stuff'.

I'm not a huge fan of Facebook as a company but I admire the engineering talent that goes into dealing with 1.5 billion active monthly users, the incredible problems of adding even tiny features at that kind of scale.

The only lesson Apple seems to have learned is that the App Store is great, and everything they're doing is working gangbusters.

How are you distinguishing between the two?

Relevancy is a relative quality. We don't say that something simply is or is not "relevant." It needs to be relevant in relation to something else. Usually some standard or topic.

Recency and popular culture are common guideposts to which we peg relevancy. If we choose to peg relevancy to 'current pop culture,' then we could say Angry Birds is less relevant today than it used to be in its prime. And we'd probably say that Angry Birds was quite relevant in its prime, being the premiere game in the breakthrough period of mainstream mobile gaming.

If we choose to peg relevancy to an industry standard -- say, 'current best practices in the gaming business' -- then we reach a similar conclusion. Angry Birds was hyperrelevant in its heyday, but less so today.

Angry Birds was the franchise that a) first proved that you could make a media empire from a single app and b) you can sell apps for $0.99 and still get mega-rich.

Incidentally, b) is no longer the case.

When you make 260 employees redundant, I'd say it's ok for people to make assumptions about your brand.

They shed staff because they usually hire on extra staff (Art/QA) to meet deadlines. Mobile game development does not have that dynamic.

The press release (http://rovio.fi/en/news/press-releases/696/rovio-sharpens-fo...) explicitly says it's a cash flow issue.

Game shop operators have wanted to do that for a long time. The challenge has been that ramping up at a game studio has been a much longer process than ramping up on a movie project. The tools, skills and processes are a lot more consistent between movies than they are between games. It often takes working through a whole game to figure out how to be really effective at a particular studio. In practice, game shops that grow and shrink rapidly have found it to be more expensive than just holding on to the staff. This also has made outsourcing difficult and limited in games.

The situation is changing slowly as the industry converges on a small number of standardized game engines. Knowing Unity or Unreal makes you easy to hire at a lot of places. But, if everyone knows Unity or Unreal, it also makes you easy to replace.

Already happening. Firms like Compucom and Blindlight specifically handle the outsourcing/temporary hiring of QA and other staff. Some studios like Behavior Interactive exist as consultants/infill for game development. Experience with Unity/Unreal and even Blender are something a lot of creative and technical staffing agencies are hiring for.

I think they did try that - I loved the Rovio game Retry, which was a tiny plane flying through a Sonic-The-Hedgehog-like world, with a Flappy Bird mechanic and a retro 80s synthpop aesthetic:

http://www.rovio.com/en/our-work/games/view/71/retry

Levels were split into checkpoints (ala Sonic), and you could save your place at a checkpoint by either watching a video ad, spending a coin (collected in game or bought with real money), or you could fly on and get a bonus for completing a level without any saved checkpoints. I'm not much of a gamer, but I've apparently spent nearly 15 hours playing Retry (yikes).

They certainly tried with Angry Birds Fight! (https://itunes.apple.com/us/app/angry-birds-fight!/id9339580...) and Angry Birds GO! (https://itunes.apple.com/us/app/angry-birds-go!/id642821482?...)

A few of the more recent physics games had strong freemium mechanics, like Angry Birds Transformers (https://itunes.apple.com/us/app/angry-birds-transformers/id8...) as well.

I can't find the quote anymore but I remember their CEO, while the company was still very new, saying that they'll never need to move away from Angry Birds and people won't get tired of it because they'll keep releasing new Angry Birds stuff. Or something to that effect.

So I can't say I'm surprised. In fact I would have thought this would have happened a long time ago. They should look into creating some new IP. In my opinion anyway. That way they could become a gaming company instead of an Angry Birds company.

Ummm what? Part of the whole point of making companies is because individuals can't risk going bankrupt to make a game, while a corporation that takes investments from people who understand that they may lose money on the deal shifts the risk to those more able to take that risk on.

Uber works because the number of cab fares is large enough that over non-tiny durations the risk averages out and makes the situation tenable for the drivers. When you deal with programmers.

Or were you thinking of something like freelancing sites like rentacoder? The internet means that those basically provide work to people with spare time or in developing countries, not first-world countries.

Like Upwork (formerly Elance and Odesk)?

Hiring contractors instead of employees isn't that uncommon, and now we're even seeing the startup studio become more popular as a business model.