Commentary

'Angry Birds' Become Wealthy Birds

AngryBirds-App-

With a massive $42 million first-round funding, mobile gaming phenomenon "Angry Birds" is poised to soar to new heights of franchise-building and merchandising. One might almost say the Finnish company behind the hugely popular title -- Rovio Inc. -- is being buoyed on a bubble of high investor expectations for the digital gaming space.

Does the company really need $42 million to keep doing what it's doing? After all, it created an entertainment sensation without any big venture financing or marketing dollars. Probably not, but in the frothy recent funding market for mobile, gaming and social networking start-ups, that figure is not quite as eye-popping as it might be otherwise.

Consider, J.P. Morgan recently raised a $1.2 billion fund just to invest in promising social media companies. Still, the $42 million is a big initial bet by Rovio investors -- led by Accel Partners and Atomico Ventures -- that the company will prove more than a one-hit wonder.

Rovio hasn't disclosed sales figures for "Angry Birds," but an ABI Research analyst in a blog post today estimated sales at just over $8.3 million -- based on 12 million iPhone downloads at 99 cents a pop, of which Rovio collects 70%. That's not counting the 30 million free downloads through the Android platform.

The Wall Street Journal story on Rovio's funding noted the company is already starting to tap into the games' broader cultural impact, selling 2 million "Angry Birds" plush toys at $12 to $15 each on its site. The addictive game will be released on all major videogame consoles later this year. There's also talk about expanding the franchise to TV via a cartoon version.

It's not hard to imagine "Angry Birds" the movie, DVD, Blu-Ray disc and any other media platform you can think of. Hopefully, not a Broadway musical, though -- that could lead to some huge hospital bills for actors injured while flying around on wires.

Can Rovio keep cranking out hit games while keeping the appetite for all things "Angry Birds" alive and growing? Who knows? The Journal article pointed out that the model would be a company like Zynga, which has managed to keep rolling out successful follow-ups to social games like "FarmVille,' "Mafia Wars,' and "Texas HoldEm Poker." Zynga has most recently been rumored to be close to a deal that would value the company at $10 billion.

Or Rovio could get swallowed up by a media giant -- as Tapulous, maker of the popular "Tap Tap" games, was by Disney last year. And other casual games and apps have soared briefly to the top 10 lists in the App Store, only to quickly fade from view as newer titles steal the spotlight. "Angry Birds" has obviously gotten past that first hurdle. But whether Rovio can stay aloft under the pressure of immense expectations is a question to be answered only in the coming months and years. For now, it's a good time to be a start-up with a hot mobile game.

1 comment about "'Angry Birds' Become Wealthy Birds".
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  1. Howie Goldfarb from Blue Star Strategic Marketing, March 12, 2011 at 7:14 p.m.

    Before Angry Birds there were a TON of similar flash games for free on the web. So lets see what they can do for a second act and trust me Facebook might not be the deal. If I can play similar games off Facebook like on Kongregate would I need to play angry birds? I thought their key specialty was being on mobile. Not the game itself.

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