To the moon and beyond
If you're not an Angry Birds addict, it's probably because you haven't played it yet. This simple game, in which you use slingshots to launch furious fowl at smug green pigs, first appeared in Apple's App Store in December 2009. Since then, fans have downloaded its various iterations more than a billion times.
“We certainly didn't anticipate that it would be this huge,” says Mikael Hed, CEO of Rovio Entertainment, the Finnish game development company. “We had already developed 15 of our own games and published a total of 51 games, so we were quite realistic about our expectations. But, of course, we did everything we could to make it as big as possible and were hoping for the best.”
“We certainly didn’t anticipate that it would be this huge,” says Mikael Hed, CEO of Rovio Entertainment.
From Exceptional magazine
Rovio feels the love
Phenomenal success has meant a seismic shift for Rovio, growing from 12 employees when Angry Birds launched to more than 300.
Revenues hit roughly US$100m in 2011, and unofficial estimates have put the company’s value in the billions. It receives a steady stream of suitors and the internet is abuzz with rumors of an IPO. The company has diversified into toys, books, activity parks and animation.
It is the sort of rapid growth that has only become possible in the past decade. With the rise of social media, a minor word-of-mouth sensation can become a global phenomenon. As a small company that found itself in this position, Rovio faced considerable challenges: to create a coherent strategy, build a good team, get sound advice, remain open to new opportunities — and hang on for dear life.
From Exceptional magazine
Building sustainable growth
While the internet is littered with companies that have failed to sustain their rapid growth, Mikael Hed is determined that Rovio will not become one of them.
B“In the early days of Angry Birds, when we only had the game and everything else was an idea, I was worried it would drop out of the [App Store] top 10 and leave us vulnerable. That's not the case now. No single business area is keeping us going. We have lots of legs to stand on.”
Getting off the ground
Niklas Hed, Mikael's cousin, founded Rovio with two of his university friends in 2003. But when Hed joined a few months later, things hadn't exactly taken off. “There wasn't really any activity in the company. They were thinking about doing some games or some programming, but nobody had any idea of how to structure that into a proper business.”
Luckily for the fledgling company, Mikael had a passion for games and a head for business. “When I joined, we set up the office, came up with a commercial strategy and started recruiting people.”
It was a dream come true for Mikael. “I was returning to Finland after eight years abroad, and this opportunity was the least lucrative one,” he says. “My gut feeling was that there was a high likelihood it wouldn't fly, but I wanted to give it a try. It was a chance to get a foot in the door of the gaming industry and to work with my cousin. That made it worth taking the risk.”
“They were thinking about doing some games or some programming, but nobody had any idea of how to structure that into a proper business.”
A rift that would change the course of the company
Rovio got to work producing a string of successful mobile games for third parties and made plans to develop its own titles. In 2005, Mikael's father invested a substantial amount in the company, heralding a rift that would change the course of the company.
The senior management team wanted to build Rovio's development capabilities rapidly and then sell the company. For Mikael and the “old-timers,” this was entirely the wrong approach.
“We wanted to build a sustainable business that would allow us to stay independent and continue to create our own games. We weren't opposed to selling the company eventually, but we thought that every business needed to have a solid foundation.”
The tension within the company grew until Mikael's father threw his weight behind the senior management team. It had turned into an “us or them” situation. “It was clear: I had to leave the company,” says Mikael. And so he did.
Senior management wanted to build
rapidly and then sell
Nearing the edge of failure
Mikael dabbled in comic books and book publishing, and built a sizable portfolio as a property developer. But these weren’t mere side projects: the skills he acquired during this time would inform the future development of Angry Birds.
In early 2009, he got a call from his cousin Niklas. Rovio was teetering on the edge of failure and had laid off 38 of its 50 employees. “We sat in a meeting room for several weeks and questioned everything we knew about game design and the game industry,” says Mikael.
They undertook some detailed market research and used the data to build a strategy:
- First, they needed to develop for the iPhone. If you succeed on iPhone, you can succeed on all the other game platforms.
- Second, it was about visibility and cost: at the time of launch, Angry Birds was competing against 150,000 other games. Rovio's strategy was to price it at 99 cents and keep it there. “We wanted to make it like a snack — an impulse purchase that people didn't think twice about.”
We wanted to make it like a snack — an impulse purchase that people didn’t think
App store blockbuster
It worked. Angry Birds not only entered iTunes’ top 10 paid apps chart, it stayed there. Now, it sells in the millions on other platforms including Android, PC and Facebook.
The latest game, Angry Birds Space, was downloaded more than 10 million times within the first three days of its release in March 2012, topping the sales charts on Apple platforms in 104 countries. No doubt the collaboration with NASA — which released a video of the game being launched on the International Space Station — contributed to this success.
In March 2011, Rovio received US$42m in venture capital funding from Felicis, Accel and Atomico, money that would be invested in expansion and game development.
But this is only the beginning for Rovio. Just as Walt Disney started with a single Mickey Mouse cartoon, Rovio has visions of a lasting entertainment empire. As Mikael says: “With Angry Birds, we’ve shown a new way of building a global entertainment franchise — and in record time, too.”
Rovio collaborated with NASA to produce the launch video for Angry Birds Space on the International Space Station.