Chief Executive of Rovio, Maker of Angry Birds Game, to Step Down

Posted by Unknown on Friday, August 29, 2014

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Technology |Chief Executive of Rovio, Maker of Angry Birds Game, to Step Down

http://nyti.ms/1ppv5vR

As Mikael Hed steps aside as the chief executive of Rovio, the company that makes the Angry Birds game, he will assume a position on its board. Martti Kainulainen/Lehtikuva, via Agence France-Presse â€” Getty Images

LONDON â€” The chief Angry Bird is leaving the nest.

Rovio, the Finnish gaming company behind the popular Angry Birds franchise, said on Friday that its chief executive, Mikael Hed, would step down at the end of the year.

The management change comes at a pivotal time for Rovio, which in 2009 was one of the first mobile-gaming companies to become a global phenomenon, attracting millions of users who played Angry Birds on their cellphones and tablets.

The appointment of a new chief executive also comes as the privately-held company struggles to respond to the trend in mobile gaming toward so-called freemium games, which let users play for free but require buying upgrades to access premium content.

Rovio introduced its first freemium game, Angry Birds Go!, last year but has been diversifying into movies, animation and themes parks to reduce its reliance on online gaming. But the freemium business model is now encountering its own struggles, as some gamers and regulators question whether companies are misleading customers by not adequately disclosing the cost of those extras. â€‹ In Angry Birdâ€™s freemium offering, upgrades that allow online characters to access later stages of the game can cost as much as $60 each.

Other gamemakers, including Zynga and King â€” the maker of the Candy Crush franchise â€” have also seen signs of consumersâ€™ flagging interest in freemium games. Investors worry that those companies, which were valued at billions of dollars in initial public offerings, may not be able to sustain momentum by creating new games that capture the publicâ€™s imagination.

In a sign of how much Rovio has changed since the original Angry Birds game, the company now generates nearly half its revenue from licensing the Angry Birds brand for consumer products like candy dispensers and lunchboxes, according to the companyâ€™s latest annual financial report.

There is no clear sign yet, though, of whether Rovioâ€™s efforts will be successful.

The company said earlier this year that its net profit for 2013 fell by more than 50 percent, to $37 million, compared with the previous year.

Revenue rose only slightly, to $216 million, from about $200 million in 2012.

That is significantly less than Rovioâ€™s Finnish rival, Supercell, which sold a 51 percent stake to the Japanese telecommunications company SoftBank for $1.5 billion last year. On the strength of its Clash of Clans franchise, Supercell reported a ninefold increase in its revenue over the same period, to $892 million.

Mr. Hed co-founded Rovio with his cousin Niklas Hed in 2003. The company is majority-owned by Mikael Hedâ€™s father, Kaj Hed, who is the chairman.

Mikael Hed will be replaced as chief executive by Pekka Rantala, the companyâ€™s chief commercial officer, who previously spent 14 years working at the Finnish telecommunications giant Nokia.

Mikael Hed has been nominated to the companyâ€™s board of directors, and will also become chairman of the companyâ€™s animation and movie business.

â€œIt has been an amazing ride,â€ said Mr. Hed, who has typically worn a bright red Angry Birds hoodie during his public appearances. â€œIn the coming months, I will be very happy to pass the hoodie to Pekka Rantala, who will take Rovio to the next level.â€