Finnish mobile game maker Rovio is to close its London studio, which employs seven staff, after revenues continued to decline.
The decision, revealed in the company's latest ‘financial statement bulletin' for January and December 2017, came after the company revealed that the number of paying players for Rovio's most popular five games fell for the second successive quarter.
The company will consolidate its games development in Finland, where it is headquartered, and Sweden. At the same time, Rovio's vice president of games, Wilhelm Taht, revealed that he was leaving the company. Taht had only been at Rovio since January 2016.
The moves are part of a restructuring at the company intended to restore confidence, wrote CEO Kati Levoranta.
She claimed that 2017 "was the best year in Rovio's history" adding that games revenue grew by 56 per cent, and group revenue by 55 per cent "due to the improved monetization of the top games".
However, she added: "In the last quarter of the year our new games, Angry Birds Match, Angry Birds Evolution and Battle Bay landed short of our expectations. Competition in the market intensified, which led to a significant increase in the unit costs of user acquisition."
On top of that, she revealed that the licensing revenues from the company's better than expected 2016 film, Angry Birds, will decline by 40 per cent. In 2018, the Angry Birds brand will be licensed to theme parks and a sequel to the first film is scheduled for September 2019.
Despite the measures, investors were unimpressed. Mathias Lundberg, an equities analyst at Swedish bank SEB, suggested that the games unit could be declining at a faster rate than expected. He estimated that it will register a decline of between seven per cent and nine per cent when it unveils its next financial figures.
Declining player numbers means fewer opportunities for in-app purchases which players are encouraged to make to help them through the games' ever-more challenging levels. The games are free to download and play, but users must keep paying up to play them indefinitely.
It has been suggested that a subscription-based model could encourage mobile game-players to return, although that would cut the return for Google and Apple, who effectively control the channel to the mobile market.
Angry Birds was arguably the first smash-hit game of the iPad era and migrated with ease to smartphones as device screens got bigger from around 2012.
However, while the company has comprehensively rinsed the Angry Birds concept in almost every conceivable way, it has failed to develop a follow-up concept that is anywhere near as popular.
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