Rovio: No IPO This Year

Speaking to Reuters, Rovio marketing chief Peter Vesterbacka told will not join the stock market this year but still aims to eventually seek an Initial Public Offering (IPO). “We are not in a rush,” he stated. “This year is way too early for an IPO, there are too many open things, and we are in a very early stage of the Angry Birds lifecycle.”

The company has not decided where it wants to list, but Rovio executives have hinted at New York or Hong Kong. Versterbacka noted that it will depend on how the markets develop.

Rovio’s biggest game, Angry Birds, has been downloaded more than 600 million times since 2009 and has helped Rovio become a $9 billion enterprise. “We had a very successful Christmas — 6.5 million downloads just on Christmas Day,” said Vesterbacka.

Analysis: I can’t decide if this is a good idea or not. Rovio is still milking the Angry Birds cow and getting away with it so far, but I fail to see how exactly Vesterbacka thinks a two-year old mobile game is still in a “very early stage” of its lifecycle. Unless Rovio has another game lined up that we don’t know about, I don’t know that it’s a great idea to have faith that the franchise is going to last another year. Sure, 6.5 million people downloaded the game on Christmas Day, but that doesn’t mean 6.5 million people actually purchased the game. According to some sources, there’s only a 2% conversion rate–that is, only 2% of people who download the game go on to buy it. If it’s been downloaded 600 million times since 2009, that’s 12 million purchases in two years. This isn’t bad but it’s not exactly groundbreaking, either.

Then again, merchandise makes up about 10-20%  of the company’s business, which includes things like doodling books, egg recipe books, plush toys, and other random items. There have been rumors of movies as well, though I don’t know how that’d pan out. But really, 150 million active users isn’t anything to scoff at, especially when you have ads in your game. There’s even an Angry Birds store in Finland as of this past November and there was a holiday special on Nickelodeon in December. To be honest, I can’t think of a mobile game that’s had the success that Angry Birds has had. So why wouldn’t they launch an IPO?

Maybe they’re looking at Zynga, who has more than a few games, and seeing how spectacularly that flop played out. I would hesitate, too, if that was the most recent example of a similar company going public. Perhaps it is best to play it safe for now, see what happens to Zynga over time, and then decide what they’re going to do. And, you know, maybe make a new game or two.


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