Rovio’s Annual Net Profits Fall 52% in 2013

Rovio, the Finland based game developer behind the Angry Brids franchise, has today announced a more than 50% drop in its 2013 net profit, to $37 million, compared with the previous year, The New York Times reports. While Rovio pushes into the world of freemium games, many industry analysts are questioning whether the business model can remain profitable for the company.

The Angry Birds maker last year launched its first effort at a freemium game, and has diversified its efforts in recent years into movies, animation and theme parks to reduce its reliance on online gaming. According to the company’s annual financial report, Rovio’s business of licensing the Angry Birds brand for consumer products like candy dispensers and lunch boxes now generates almost 50% of the company’s yearly revenue.

Rovio’s chief financial officer, Herkko Soininen, called 2013 “a foundation-building year”. “We invested in new business areas, such as animation and video distribution, ventured into new business models in games, and consolidated our strong market position in consumer products licensing,” he said in a statement.

The efforts to alter the company’s business model, however, have yet to take root. Rovio’s revenues last year fell slightly, to $216 million, compared with 2012. Rovio’s earnings fell 52 percent, to $37 million last year, compared with $77 million in 2012.

In contrast, Supercell, the Finnish company behind the Clash of Clans franchise, reported a ninefold increase in its revenue over the same period, to $892 million.