
Rovio did $3 billion in revenue and is “insanely profitable” - dirtyaura
http://www.whiteboardmag.com/peter-vesterbacka-rovio-did-3-billion-in-revenue-and-is-insanely-profitable-graph/
======
mbesto
I genuinely like that Rovio is making good money, however it's this type of
hyperbolic growth that is (1) not realistically reproducible and (2) makes
people think that it's reproducible. In other words, an outlier. It once again
reinstates the idea that the general public thinks this stuff is built over
night and an app can be made with $10k.

This is not an knock on the author, but I think a more thorough report on the
years of poor growth Rovio experienced is much more enjoyable and realistic to
read. I can't find it right now, but I believe the Atlantic wrote something
just like that.

Edit: I should probably clarify, I actually think the bigger issue I have is
that the graph is particularly disingenuous, the "hockey stick growth" should
follow the company from when they were founded in 2003...10 years ago. It may
actually like more like a traditional hockey stick.

~~~
bergie
Yep, I've heard that they made dozens of games before Angry Birds took off. I
would like to think that this shows the sort of long-term view the government
R&D grants can give you.

Which VC would let you continue after, say, ten failed products?

note: I have no info on whether this is the case for Rovio, but I know the
government has been trying to support / set up the Finnish game industry
cluster for around ten years, and now with Rovio and Supercell that is finally
starting to pay off.

~~~
frogpelt
Surely you aren't suggesting that the government should fund game developer
R&D.

Forcing the general public to fund bringing your ideas to fruition is a
_completely unsustainable_ economic model.

Governments all over the world are flat broke from this type of thinking.

~~~
coldtea
> _Forcing the general public to fund bringing your ideas to fruition is a
> completely unsustainable economic model. Governments all over the world are
> flat broke from this type of thinking._

Actually most of the cool stuff we have, we have it because of government
funding research. Including the very internet.

~~~
frogpelt
While, you are correct that a lot of innovation and "cool stuff" has come from
government programs and funding, I would disagree that "most" of it is because
of government funded research.

Can you prove to me they wouldn't exist otherwise? People like Tim Berners-Lee
didn't come up with the ideas they came up with because they were government
funded. They created things because they were innovative and smart.

The fact that YC exists is proof that government programs are not a
prerequisite.

~~~
coldtea
> _Can you prove to me they wouldn't exist otherwise? People like Tim Berners-
> Lee didn't come up with the ideas they came up with because they were
> government funded. They created things because they were innovative and
> smart._

That's orthogonal. And company X's engineer didn't create Y because he was
working in the private sector, he created it because he was innovative and
smart.

Still, Tim Berners Lee WAS government funded. As was Arpanet. As was TCP-IP.
As was most early work on computers. As was lots of basic physics, chemistry
etc research before the US had any scientists worthy of mention (in Germany,
France, Britain etc).

------
zura
I think Rovio and other similar (and similarly successful) game publishers owe
at least one Ferrari to the Box2D author :)

~~~
paulhauggis
Should all of the startups on HN owe the creators of PHP, rails, python, and
every other framework a Ferrari too?

~~~
coldtea
> _Should all of the startups on HN owe the creators of PHP, rails, python,
> and every other framework a Ferrari too?_

If they are successful and the rely on those programs, sure, why not?

That's how you get more support for Open Source software, and more funds for
projects that benefit everyone. OSS was moving faster at the late nineties-
early 2000s, when huge companies employed tons of people to work on the Linux
kernel, libs, frameworks, the desktop, etc, that it does now.

~~~
bergie
It may be a cause or effect of this, but the open source culture has fractured
in the 2000s to many smaller projects or libraries instead of these huge mega-
projects (say Linux, GNOME, KDE, Mozilla, OpenOffice) that mostly come from
the 90s.

~~~
coldtea
I'd say it's an effect. Without corporate funding large and co-ordinated
projects (Gnome, KDE, OpenOffice et al) have fallen by the wayside.

That's why progress has got so slow the last 6-8 years in so many parts of the
OSS world (and on lots of proprietary software, that lazily relies on OSS).
Things like Gnome or OpenOffice are essentially the same as they were 10 years
ago, whereas the proprietary alternatives have gotten tons of changes.

GTK+, the main toolkit behind Gnome has one (1!) major contributor (which
complained about the issue). In a proper world, something like this, used by
so many millions, should have at least a full time team of 10 persons.

Contrast the additions to GTK+ in the last 10 years with the development of
the corresponding Cocoa libs, and it's like night and day. A tree-view widget
here, a spinner there, ...

Small libraries and stuff can still flourish under such an environment, but
not big, co-ordinated projects.

~~~
bergie
I'd agree otherwise, but GNOME is a bad example. In the last couple of years
they've rewritten a lot of their stack. All APIs are now on GObject
Introspection, the GNOME Shell is a completely new thing, written in
JavaScript, new set of default applications, etc.

But then again, they seem to still be receiving some amount of corporate
sponsorship from Red Hat.

A few years back (when Nokia stopped supporting the project) things looked a
lot more gloomy: [http://wingolog.org/archives/2008/06/07/gnome-in-the-age-
of-...](http://wingolog.org/archives/2008/06/07/gnome-in-the-age-of-decadence)

Then again, any desktop environment or toolkit is bound to be somewhat unsexy
these days when the focus is on web and mobile.

I also wrote about this back in 2008:
<http://bergie.iki.fi/blog/gnome_in_decay/>

------
rafweverbergh
Thanks for posting, dirtyaura (I wrote the article). Rovio is insanely good at
keeping that Angry Birds brand relevant, but I do wonder whether they're too
dependent on that one brand. (Armchair business strategist much, lol?)

~~~
vilpponen
Good story, however I'd like to ask if Vesterbacka made any clearer statements
on what "managing revenue" means. Their 2011 filing for the Finnish officials
state they made about 75 million euros in revenue (far from the $500 million
cited in the article).

Does this number represent the value of the merchandise sales of the company
or was he explicitly referring to the revenue of Rovio itself?

Edit: here's the link to the Finnish officials' records
[http://finder.fi/Televiestintälaitteita%20ja%20palveluja/Rov...](http://finder.fi/Televiestintälaitteita%20ja%20palveluja/Rovio%20Entertainment%20Oy/ESPOO/taloustiedot/1176759)

~~~
antr
Finnish accounts show only the financials of the individual P&L rather than
the "consolidated Rovio group" P&L. Unless one is provided with an
organisational and shareholding structure (with corresponding financials) it
is impossible to know what is and isn't accounted.

~~~
rafweverbergh
So you're basically saying we can't know how much business Rovio is generating
through fiscally optimized holding structures outside Finland, then?

------
rafweverbergh
In other news, you guys crashed the server. It will be up again soon.

------
JamesArgo
Which games take off is not super correlated with quality; I would argue that
Angry Birds is above average, but not exceptional. The whole "hit" phenomenon
is highly dependent on initial conditions, a sort of semi-random positive
feedback loop. When building a game, one's idea of success should be the
cultivation of a dedicated audience large enough to sustain your business.
Counting phantom billions will lead to terrible design decisions, usually
imitating random aspects of successful projects, like some statistically-
illiterate lotto player diligently searching for patterns in previous winning
numbers.

------
dirtyaura
As I originally posted this to HN, I must say that the claims in the article
don't hold on closer inspection. I shared it too quickly without checking
facts and thinking it through, shame on me on spreading misinformation.

Good commentary about the claims: <http://bgr.com/2013/02/11/rovio-revenue-
debunk-324583/>

~~~
rafweverbergh
As the author of the article, I share your concerns.

I asked Vesterbacka for comments when I posted the first version, but he only
responded later this afternoon. (I'm now waiting for feedback from the
Marketwatch/WSJ reporter where the claims originated).

If you've followed the post, you'll see that I updated it regularly in the
course of the day with information from this thread, with a window of a few
hours where unfortunately I couldn't update the post because the site went
down.

------
JeffKnol
It's reprehensible that they aren't directly funneling all profits to the
creator of the Box2D framework. All they did was skin a few Box2D function
calls.

~~~
atonse
My apologies if you're joking or being sarcastic and I didn't detect it.

I suppose if that's "all they did" - any of us who could do that could've been
sitting on that 3 billion, right? Heck, even the Box2D guys could've done it.

There's a small difference in saying "they should've employed the Box2D guys"
or "generously funded the project" and "they should funnel all profits" -
perhaps Rovio deserves some credit here for turning a little casual iPhone
game into a household name.

~~~
seanmcdirmid
Parent should really adhere to Poe's law of internet trolling.

