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 theme 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 the extras. In Angry Bird’s freemium offering, upgrades that allow
online characters to access later stages of the game can cost as much as $60
Other gamemakers, including Zynga and King — the maker of
the Candy Crush franchise — have also seen signs of consumers’ 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 public’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 company’s latest annual financial report.
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.
Mikael Hed will be replaced as chief executive by Pekka
Rantala, the company’s chief commercial officer, who previously spent 14 years
working at the Finnish telecommunications giant Nokia. Mikael Hed has been
nominated to the company’s board of directors, and will also become chairman of
the company’s animation and movie business.
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