Rovio, the video game developer behind the popular Angry Birds franchise, has closed its studio in London despite CEO Kati Levoranta hailing 2017 as the “best year” in the company’s history.
The announcement came alongside news that head of games Wilhelm Taht had resigned after Rovio’s share price dropped by 50 per cent following a profit warning.
Mark Sorrell, head of Rovio’s London studio – which employed seven developers – said on Twitter: “It’s with a heavy heart that I tell you the @rovio London Studio is going to close. Sad times for us, but I look back with genuine pride at my time with these talented and kind people. Been quite a ride.”
Rovio grew revenue by 17 per cent to €73.9m in the final quarter of 2017, but this fell below analyst estimates of €77.3m.
Operating profit more than doubled to €10.4m between October and December 2017, while pre-tax profit soared from €5.1m to €9.9m.
“The year 2017 was the best year in Rovio’s history,” CEO Levoranta said, but added that new games Angry Birds Match, Angry Birds Evolution and Battle Bay “landed short of our expectations”.
It’s with a heavy heart that I tell you the @rovio London Studio is going to close. Sad times for us, but I look back with genuine pride at my time with these talented and kind people. Been quite a ride. pic.twitter.com/EYxO3ZZmaA
— Mark Sorrell (@Sorrell) March 2, 2018
Rovio said it reduced its investments in user acquisition after competition in the market intensified.
“Although Rovio’s business has a healthy foundation, we are not satisfied with the current performance,” Levoranta added.
“Our intention is to return to a higher growth path. We seek to grow our games business through continuous development, renewal, and improved monetisation of our current top live games, and through profitable user acquisition.
“This Games-as-a-Service model was well proven by our top game Angry Birds 2 as it grew its gross bookings by 83 per cent in 2017. Likewise Angry Birds Friends, launched in 2012, still goes strong.
“While we see a lot of potential in our existing live game portfolio, Rovio also continues to invest in the development of new games. In response to the increased competition we want to raise our game development and operations to the next level.”
Rovio’s group revenue is expected to be in the region of €260m to €300m in 2018, compared with €297m in 2017.