Unhappy Rovio says 2017 was its 'best ever year'

A defiant Rovio says that 2017 was the best year in its history, amid investor disappointment, high profile departures and the closure of its London studio.

2017 revenue increased 55% to €297.2 million. Operating profit rose to €31.4 million (from $16.9 million), and its games revenue in particular increased by 55.9% to €248 million.

Declines were felt in its licensing division, hit by a slowdown in sales of Angry Birds Movie merchandise during Q4 - as would be expected a year after launch.

Rovio expects revenue in 2018 to come in at between €260 million - €300 million, as previously reported.

It is this that has scared investors, and seen the firm's share price fall sharply. Despite strong figures, the firm is performing well below expectations.

The main reason for this is the under-performance of its most recent games - Angry Birds Match, Angry Birds Evolution and Battle Bay. All three have fallen short of its expectations. To make matters harder, Rovio's games boss Wilhelm Taht has now left the firm due to personal reasons.

The company says it is going to focus on growing the Angry Birds brand via other entertainment mediums - including video, a theme park and the build up to the next Angry Birds movie. It has also closed its London studio to focus development efforts in Espoo and Stockholm.

"The year 2017 was the best year in Rovio's history," said CEO Kati Levoranta in a statement.

"The performance indicators of the company's top games improved and hames revenue grew by 56%. Group revenue increased by 55%, and both the adjusted operating profit and earnings per share doubled.

"During the year the key figures of games segment showed strong development due to the improved monetization of the top games. However, 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, especially in the puzzle genre.

"Although Rovio's business has a healthy foundation, we are not satisfied with the current performance. Our intention is to return to a higher growth path. We seek to grow our Games business through continuous development, renewal, and improved monetization of our current top live games, and through profitable user acquisition.

"This Games-as-a-Service model was well proven by our top game Angry Birds 2 as it grew its gross bookings by 83% in 2017. Likewise Angry Birds Friends, launched in 2012, still goes strong. While we see a lot of potential in our existing live game portfolio, Rovio also continues to invest in the development of new games.

"In response to the increased competition we want to raise our game development and operations to the next level."

"The revenue of the Brand Licensing business decreased in the fourth quarter as expected by the declining revenue profile of the Angry Birds Movie. In spite of the decrease in revenues, the unit's EBITDA amounted to nearly 50% of revenues. Rovio will continue to strengthen the Angry Birds brand in 2018 by bringing new video content to the market in cooperation with partners, licensing the brand for new activity parks, and preparing the launch of the Angry Birds Movie sequel, set for release in September 2019."

Rovio will continue to invest in its Hatch mobile streaming service.