Rovio prepares to sell Hatch following lacklustre financials
Angry Birds developer sees annual profit and revenue decline following "best ever year"
Coming off the back of its "best ever year", Finnish mobile developer Rovio Entertainment is prepared to sell its controlling share of Hatch Entertainment after posting a decline in revenue and profits for 2018.
The mobile game streaming platform which launched in the limited regions late last year is currently 80% owned by Rovio.
However, in a statement released today, CEO Kati Levoranta said Rovio is "prepared to reduce its ownership in Hatch Entertainment below 50%" as the company seeks external funding.
This month, Hatch announced a partnership with Japanese mobile operator NTT DoCoMo, with the aim of bringing 5G cloud gaming to Japan.
Rovio share price took a 9.8% dip this morning following its lacklustre financial results and -- despite recovering somewhat -- is still marching steadily downwards at the time of writing.
Hatch Entrainment played a significant role in a company-wide profit decline of 22%, down to €31.4 million for the year.
However, even excluding Hatch from the figures, profits were still down 5.6% to €38.4 million.
Annual revenue was down 5.4% to €281.2 million year-on-year, impacted partly by a "large revenue peak" from the Angry Birds Movie in 2017.
The games segment saw a 1% bump to €250.4 million, with the company spending 31.4% of gross income on user acquisition which increased last year by 12.9% to €78.6 million.
Meanwhile, the two-year content roadmap revealed in May last year has yet to yield results, with brand licensing revenue down 37.4% to €30.8 million. Again, the revenue spike from the Angry Birds Movie was attributed to the comparative decline last year.
The Q4 results paint a fairly similar picture with profits declining 49.5% year-on-year to €5.3 million for the period.
Overall revenue fared better, but was still down 1.7% year-on-year to €72.7 million.
Levoranta confirmed that the developer's next game is likely to launch in the second half of 2019.
"We have strengthened our new games pipeline which consists of 13 new games in development for 2019-2021, of which one is in soft launch," she added.
"We are naturally also excited for the premier of the Angry Birds Movie sequel in August and expect the movie and surrounding marketing to boost our licensing business as well as drive users to our Angry Birds games towards the end of 2019."