Rovio user acquisition spend impacts profit

23 NOV 2017

In its first results as a listed group, Rovio revealed it spent €22 million on acquiring new users for its games in Q3 2017, an increase of almost €17 million year-on-year.

The outlay impacted Rovio’s profit: the Angry Bird maker posted a €500,000 pre-tax loss, compared to a profit of €4.6 million in the 2016 quarter. Operating profit dipped 70 per cent year-on-year to €1.6 million.

CEO Kati Levoranta said the decline in profitability was predictable as the company “significantly increased our investments in user acquisition, and at the same time in future revenues for our top-performing games”, a move she said was in line with the company’s “games-first growth strategy”.

“We expect the payback time for these investments to be eight to ten months,” Levoranta added. She pointed to the launch of Angry Birds Match in August as an example, noting the game delivered “promising performance indicators” and holds the potential to become one of Rovio’s “best performing games”.

Revenue in the third quarter of €70.7 million was up 41.2 per cent year-on-year.

Rovio beat its predicted $1 billion valuation following an IPO in September, but was valued at €896 million at the end of its first day of trading. The Q3 loss is likely to add to investor worries, despite the revenue bump.

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Saleha Riaz

Saleha joined Mobile World Live in October 2014 as a reporter and works across all e-newsletters - creating content, writing blogs and reports as well as conducting feature interviews...More

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