Rovio Sells Animation Unit, Publishing To Startup Led By Ex-CEO Bloomberg
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Rovio Entertainment Divests Its Animation and Publishing Businesses to Kaiken Entertainment
Rovio Entertainment, the Finnish company behind the popular Angry Birds franchise, has announced that it has sold its animation studio and book publishing arm to Kaiken Entertainment, a new startup founded by former Rovio CEO Mikael Hed.
The deal, which was reported by Bloomberg on Tuesday, is part of Rovio's strategy to focus on its core gaming business and reduce its dependence on the volatile entertainment industry. Rovio has been struggling to maintain its profitability and growth in recent years, as it faced increasing competition from other mobile game developers and declining demand for its licensed products.
Kaiken Entertainment, on the other hand, is a new venture that aims to create original stories and characters across multiple platforms, including games, animation, books, comics and virtual reality. The startup has acquired Rovio's animation studio in Vancouver, Canada, as well as its book publishing team in Helsinki, Finland. Kaiken will also take over the production of the Angry Birds TV series and movies, as well as the rights to publish books based on Rovio's brands.
Mikael Hed, who served as Rovio's CEO from 2009 to 2014 and oversaw the company's rapid expansion and success with Angry Birds, said that he was excited to work with his former colleagues again and to continue building on the legacy of Rovio's entertainment properties. He also said that Kaiken will leverage its expertise and network in the global entertainment industry to create new and engaging content for audiences of all ages.
\"We are thrilled to acquire Rovio's animation studio and book publishing team, which have been instrumental in bringing the Angry Birds universe to life on screens and pages. We have a shared vision of creating captivating stories and characters that can inspire and delight people around the world,\" Hed said in a statement.
Rovio's CEO Kati Levoranta said that the divestment was a win-win situation for both companies, as it allowed Rovio to focus on its core gaming business and Kaiken to pursue its own creative vision. She also said that Rovio will continue to collaborate with Kaiken on future projects involving its brands.
\"We are happy to support Kaiken Entertainment in their ambitious plans to develop original IP and stories. We believe that they have the passion and talent to make it happen. We will also continue to work closely with them on the Angry Birds franchise, which remains an important part of our portfolio,\" Levoranta said in a statement.
The financial terms of the deal were not disclosed. According to Bloomberg, Rovio's animation unit generated about 6.4 million euros ($7.7 million) of revenue in 2020, while its book publishing arm generated about 1 million euros ($1.2 million). Rovio's total revenue for 2020 was 272.2 million euros ($327.5 million), down 9% from 2019.
The sale of Rovio's animation and publishing businesses comes as the company is undergoing a major restructuring and cost-cutting plan, which was announced in February. The plan involves laying off about 130 employees, or 16% of its workforce, and closing down some of its offices. Rovio said that the move was necessary to improve its operational efficiency and profitability in the long term.
Rovio's gaming business, which accounts for about 94% of its revenue, has also faced some challenges in recent years. The company has struggled to replicate the success of Angry Birds, which was launched in 2009 and became a global phenomenon with over 4.5 billion downloads. Rovio has tried to diversify its portfolio with new games and genres, such as Angry Birds Dream Blast, Small Town Murders and Darkfire Heroes, but none of them have reached the same level of popularity or profitability as Angry Birds.
Rovio is also facing increasing competition from other mobile game developers, such as Zynga, King and Supercell, which have been able to attract and retain more players with their hit titles, such as Candy Crush Saga, Clash of Clans and FarmVille. According to Sensor Tower, a market research firm, Rovio ranked 63rd among the top mobile game publishers by revenue in 2020, down from 39th in 2019.
Despite these challenges, Rovio remains optimistic about its future prospects and growth potential. The company said that it has a strong pipeline of new games in development, as well as plans to expand its presence in emerging markets, such as China and India. Rovio also said that it will continue to invest in its existing games and brands, as well as explore new opportunities in the gaming industry.
\"We are confident that we have the right strategy and capabilities to deliver long-term value for our shareholders and fans. We have a clear vision of becoming a leading mobile game company with a strong portfolio of live games and a robust pipeline of new games. We are also excited about the potential of new technologies and platforms, such as cloud gaming and 5G, which will enable us to create more immersive and engaging experiences for our players,\" Levoranta said in a statement. aa16f39245