Angry Birds maker Rovio could reduce its ownership in cloud-based game streaming service Hatch Entertainment by at least 30 per cent in a bid to raise funds.
CEO Kati Levoranta said in an earnings statement: “To accelerate its growth, Hatch Entertainment, Rovio’s 80 per cent-owned subsidiary…is seeking external funding and further strategic partnerships. Hence, Rovio is prepared to reduce its ownership in Hatch Entertainment below 50 per cent”.
The announcement comes on the heels of an investment by Japanese operator NTT Docomo in Hatch, part of a partnership that will see the operator bring more games to its Japanese customers.
Levoranta commented as the company announced operating profit fell 43.4 per cent year-on-year in Q4 2018 to €5.9 million on revenue of €72.7 million, down 1.7 per cent.
Rovio stated the drop in profit was due to a lack of new game launches during 2018, higher user acquisition costs and a decline in brand licensing revenue following a bumper 2017 when the figure was inflated by income from the first Angry Birds Movie.
However, Levoranta was optimistic, stating 2018 was characterised by continuously improving games and optimising user acquisition. She added average revenue per daily active user and monthly average revenue per paying user “reached a new high”.
Full year operating profit of €31.5 million was broadly flat on the €31.4 million generated in 2017, while revenue fell 5.4 per cent to €281 million.
The company predicted revenue in 2019 will be in the range of €300 to €330 million, with 13 new games in development for the period to 2021.
Levoranta also pointed to the pending release of a sequel to the Angry Birds Move in August as a positive, predicting uptick in Rovio’s licensing business and use of the related mobile game “towards the end of 2019”.Subscribe to our daily newsletter Back