The maker of popular mobile video game “Angry Birds” is having trouble feathering its nest.
Rovio Entertainment, the Finnish company that makes “Angry Birds,” said on Monday that net profits declined by more than 50 percent in 2013, while sales increased by just 3 percent for the year — raising questions about whether the company is going the way of “FarmVille” maker Zynga.
Publicly traded Zynga saw revenues drop to $873 million last year from $1.28 billion in 2012 as fickle mobile gamers moved on to newer fads like “Flappy Bird” and “Minecraft.”
“Angry Birds” topped the Apple Store’s list of most downloaded paid apps in 2012. Today, “Angry Birds Star Wars II” is the 16th most downloaded paid app. Its free game, “Angry Birds Go,” ranks 89th among free downloads in the Apple Store.
Compounding the trouble for Rovio has been its costly plan to turn itself from a game maker into an entertainment brand like Disney, including opening theme parks, licensing merchandise and starting a television studio.
In 2013, Rovio opened six theme parks across Spain, Finland and China. In addition to the television studio, Rovio formed a movie-animation production team in Los Angeles last year that is working on the first “Angry Birds” feature film, which is set to premiere in July 2016.
Rovio Chief Financial Officer Herkko Soininen wrote off the profit losses as the result of “a foundation-building year.”
“We invested in new business areas, such as animation and video distribution,” Soininen said. “With these investments, we have been gearing up for the future growing markets.”
Rovio reported revenue for the year of 156 million euros ($216 million) versus 152.2 million euros in 2012. Net profit after tax was 26.9 million euros ($37.2 million) in 2013, compared to 55.5 million euros ($76.8 million) in 2012.
Rovio said the company’s main source of revenue remains paid games, free-to-play virtual goods and advertising.
Yet its consumer products business appears on track to exceed its gaming revenues, as it now accounts for 47 percent of total revenue in 2013. Rovio said.
Rovio said it has also boosted staff — yet another costly expenditure — to 800 people in 2013, from 500 in 2012.
The privately held company didn’t break down its expenses, and a request for more details on spending wasn’t immediately returned.