Angry Birds raise $42M? | Hacker News Reader

Angry Birds raise $42M?

gigaom.com

37 pointsdavidblerner29 comments

This doesn't seem too crazy to me. I see three things here: the Angry Birds Games, the Angry Birds Brand, and Rovio.

I can't help but think that the brand itself has huge potential. Put this in the hands of Disney say, with movies, merchandise and licensing (McD Angry Birds Happy Meals) and the brand is probably worth at least a couple hundred millions. Not saying it's a given, they need to execute properly. Anyone remember Club Penguin (it's still around)...this seems way bigger than that.

This game is also well suited for the ultimate platform: game boy. That could be worth a little goldmine itself.

As for the developer, I have no clue, but I wouldn't bet against their next project.

You realise the Game Boy has been discontinued for many years?

Sorry, I mean whatever current portable gaming device nintendo is selling tens and tens of millions of.

Just for the record, that's the Nintendo DS, which is also a touch screen (albeit with a stylus) so the gameplay wouldn't really suffer.

There are more iOS devices than Nintendo DS devices, for what its worth.

But they're a demographic that bought them so that they could spend $20+ regularly on video games so you could expect penetration or prices to be higher.

and there are more people in Europe than the USA - but that doesn't mean you ignore the US market.

Even if all things were equal, Nintendo portable is still a huge market. While the lines are blurring, I still think DS is a game device, and iOS isn't - specifically with respect to how much people pay/expect from games. The development costs for DS would be higher - as you'd have to build a longer game, but the so too would the margins.

Given that Nintendo is currently afraid of the iOS platform, I don't think it's a given that putting it on DS would mean much.

I don't know why you'd say that Nintendo is afraid of iOS. Or rather, the reasons for them being afraid of mobile platforms is a little different than you are implying. During Iwata's keynote at GDC, he spent a while talking about these platforms and how they are saturating the market with low-quality games that are bogging down the industry as a whole and lessening the value of big budget, well-produced games made by your more traditional gaming companies. He's afraid that the value of content will decrease as the amount of content available increases, which is certainly a valid concern.

If you meant that Nintendo should be afraid of the massive success of iOS, then yeah, I kind of agree. Still, making a sequel to a monumentally successful mobile game on the most successful gaming console at the moment (or its 3D successor, due to launch soon) would hardly be a bad idea. Yeah, lots of "non-gamers" love Angry Birds, but that's the same market that Nintendo had been going after with the DS in the first place (remember Brain Training?).

Railing against the quality of games on the platform is rich, coming from Nintendo, since the Wii is a landing zone for shovelware like never before, and the DS has been just as bad.

I chose to interpret their GDC keynote as an attack from being backed in to a corner. Someone else stole their schtick, and now they are panicking.

Honestly I'm baffled as to why they need to raise funding. The game is still #2 & #5 on the app store, so they've got to have pretty significant revenue coming in.

This feels like expanding just for the sake of expanding. They should focus on what they're good at, which is making games. It doesn't take a large company to develop games like angry birds.

By that logic, Microsoft should raise 50B from investors to bring their wildly successful MS Paint application to more platforms.

42M for the equivalent of a flash game? There's no bubble here, move along.

The comparison isn't really fair, since they sell the game and make money - a different model than flash games (advertising, free distribution).

The problem with launching these apps is the amount of noise you need to break through in the app store to differentiate a product. People will probably start following brands instead of titles when searching for new content. This is already the case with other platforms, such as Zynga (Facebook), and EA (desktop, consoles). In that sense, the brand could become entrenched and very valuable.

There is no brand leader in mobile applications, yet.

There was an article on HN a few days ago that explained how Angry Birds was in the iTunes store for several weeks and got no traction. It was only after Rovio partnered with a company with a good relationship with Apple and got the game featured on iTunes that it took off.

It has gotten to the point where companies develop entire games then give them away for free, just as a vehicle to advertise for their other pay or freemium games.

Only on iOS. The Android version is ad-supported.

There's an OS X version in the app store as well that costs $4.99.

I think EA's marketing muscle is the reason their games tend to get "discovered", not that gamers are paying any attention to the EA brand (mostly they seem quite hostile towards it).

I'm not sure why people think there is any particularly high amount of noise to break through in the app store. If you write a book and get your local bookstore to carry it, there is almost no chance you are going to sell a lot of copies just by putting it on the shelf. The same would apply to records or PC software if people actually bought either of those.

If you don't have people coming to the app store specifically to buy your app, you aren't going to sell very many copies. That isn't a grim reality of the app store, it's a grim reality of selling anything anywhere.

125 years of Angry Birds is being played every day.

It seems that people still don't get it how different Angry Birds' success is compared to what has been before. There aren't many game brands that are known by almost everybody from kids to middle-aged housewives. Even Microsoft is leveraging Angry Birds brand to advertise Bing! http://www.arcticstartup.com/2011/03/09/microsoft-partners-w...

In addition to working on everything from plush toys to movies around Angry Bird brand, Rovio is also already executing their platform strategy with in-app operator payments and the Might Eagle cross-app virtual good.

Sounds like founders taking cash off the table to me.

Wouldn't surprise me. Large round, company being courted by many investors, already bringing in a ton of money - all the conditions are right.

Not to say that this valuation indicates a bubble but I find it interesting to compare it to the Moorhuhn Game Series which was popular quite a few years ago. Seems to have been the equivalent of Angry Birds in the early 2000's.

Propelled by the game's popularity, its Bochum-based publisher Phenomedia AG, who had acquired Art Department, went public in late 1999 at the height of the dot-com bubble and attained a market value of up to one billion Euro.

http://en.wikipedia.org/wiki/Moorhuhn

Wow, $42 million is a whopping huge Series A.

I'm actually surprised that Rovio is going this route. From what I read, it seems that game financing goes along a different route normally (taking the form more similar to a bond IIRC; anyone knowledgeable care to enlighten?).

Repeat success is any field like this is hard. There are only a handful of studios who have had sustained repeated success and that typically revolves around a successful franchise. For example:

- id Software (Quake/Doom);

- Epic Games (Unreal)

- Rockstar (Grand Theft Auto);

- Infinity Ward (Call of Duty).

One (admittedly huge) hit does not a franchise make, or at least not a proven franchise. It'll be interesting to see what Rovio does with this money, whether they try and (further) leverage the Angry Birds franchise and really what the future of mobile gaming is.

If you estimate that a Series A round will take a 25-40% stake in a company that puts a ballpark post-money valuation of $100-160 million, which is impressive.

I think you should look at this financing more as creating the next Zynga, than the next "old school game studio". I bet they proved they can up sell "different but the same" games thanks to the Halloween specials of Angry Birds, and so on.

They've already spunoff with Angry Birds Seasons. Given the success of that app, I think they can build more Angry Birds Topical apps like:

Angry Birds Transformers. Angry Birds Harry Potter. Angry Birds Cars. Angry Birds Kungfu Panda. Angry Birds Democrats!

But they would have to pay for all of those. Its more likely to see something like "Angry Birds Forth of July!", right?

That's Angry Birds Seasons. New level sets for each holiday all in the same app.

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