Rovio saw a decrease in revenue of 9.2 per cent year-on-year as it generated €67.9 million ($79.3 million) in Q3 2020.
The drop in earnings has been attributed to lower brand licensing revenues. However, thanks to stable income from key titles and a lower level of user acquisition, Rovio’s group adjusted operating profit grew to €12.8 million ($14.9 million).
UA investments were at €15.3 million ($17.8 million), and they accounted for 23.8 per cent of revenue generated by the games segment.
Game on
Meanwhile, games revenue saw a decline of 3.3 per cent year-on-year as it generated €64.2 million ($75 million). Furthermore, gross bookings for games was at €64.5 million, a slight decrease of 0.9 per cent year-over-year.
However, it is worth noting that in comparable currencies, games revenue and gross bookings increased by one per cent and three per cent year-on-year, respectively.
In June, Rovio launched its new puzzle game, Small Town Murders. Throughout Q3 2020, the company continued to scale the game, which resulted in it making €3 million ($3.5 million).
However, the company’s largest game, Angry Birds 2, also performed well as it experienced growth year-on-year.
Positive quarter
“In Q3 2020, our Games revenues declined slightly quarter-on-quarter after the revenue and player engagement normalised from the peak during the global shelter-at-home situation in Q2 2020. The revenues were higher than in Q1 2020 and, in comparable currencies, games revenues grew by 1% and gross bookings by 3% year-on-year,” said Rovio CEO Kati Levoranta.
“The user acquisition investments were marginally increased quarter-on-quarter as expected as we continued to scale up our newest game Small Town Murders. However, during the quarter, the user acquisition investments were at a considerably lower level than in Q3 2019.
“As a result of the moderate level of UA investment and stable games revenues, the profitability continued to be at a high level and improved significantly year-on-year. As earlier stated, our UA investments are driven by our 12-month payback model, and the overall investment level is dependent on both the games performance and the external market environment. Due to high profitability, our operative cash flow was very strong.
“During the third quarter, our largest game, Angry Birds 2 grew year-on-year and has continued at a quite stable run-rate since the end of Q2 when the revenues normalized after the Covid-19 peak.”
Rovio’s chief exec Levoranta is set to depart the company at the end of the year.
