How Rovio make money

The company makes money in following ways:
  • Paid game downloads
  • Ads and partnerships
  • Merchandise and retail

Paid game downloads: 

Business Insider estimates that Rovio still makes most of its revenue from the sale of various Angry Birds games. Some reports say that as much as two-thirds of the company’s revenue comes from game sales. “Angry Birds” is just one game, but it comes in many versions (“Angry Birds Seasons”, “Angry Birds Rio” and so on) and on many platforms. Prices vary from free (with ads) to $4.99 with a frequent pricepoint at $0.99.

Ads and partnership: 

After sales of games, ads are the biggest source of revenue for Rovio and are essential to the company. Rovio co-founder Peter Vesterbacka has claimed that Angry Birds has 10 billion ad impressions a month and has even called the game not a game, but an advertising network to challenge Google’s.

Rovio also uses creative partnerships that double as ads, in a sense, for both Rovio and their partners. For example, on the Chrome browser version of Angry Birds, a game sponsor is Wonderful Pistachios. Their logo appears prominently in the game, and players are told you can buy specially-marked bags of the pistachios and get special codes to unlock features in the game, or win prizes

Merchandise and retail: 

But the next big step for Rovio is to expand its merchandising and number of retail outletsThe company began selling merchandise online about a year ago, and has expanded the number of products you can buy. Rovio has also said that sales of merchandise now make up anywhere from 10-20% of its revenue.

Bottom Line:

  • Rovio has a strong fan base, all over the world in diverse markets, that’s continually shown its loyalty by downloading updates and new versions of Angry Birds and buying themed merchandise (and this loyalty hasn’t seemed to wane in the last two years);
  • The company is run by a smart, energetic and creative team who are willing to take risks (not sell to Zynga, for example), show dogged tenacity (see: 51 previous games), and seem to truly like and believe in their products and their fans;
  • Rovio’s astounging user and revenue growth suggests the company is ahead of a massive opportunity.

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