“With consumer fatigue setting in, the firm is facing the harsh reality that one success does not a sustainable business make” (Angry Birds: Falling Afoul Of Early Success, Andrew Delios, Kulwant Singh, and Ang Swee Hoon).
The commentary (TODAY, Oct. 16) may be right about the obvious challenges faced by Finnish entertainment media company Rovio – best known for creating the “Angry Birds” franchise – but without deeper analysis, especially with perspectives gleaned from the management team and employees of the company, meaningful insights are far and few between. With burgeoning tech and startup ecosystems around the world, it has already been established that: first, most mobile applications, not just games, “tend to have an extremely short life cycle and low consumer loyalty”; second, monetisation is difficult in a crowded, global marketplace; as well as third, there are no formula to virality and the network effect, and in this vein “repeating an initial success is not easy”.
Are Rovio and its executives cognisant that “one success does not a sustainable business make”, and of these aforementioned challenges? One would think so. When I was at Aalto University in 2014 – in Helsinki, Finland, for an exchange programme – representatives paid a visit to the business school for a sharing session, where questions were asked about the “Angry Birds” appeal and its sustainability. The representatives were not oblivious to the importance of diversifying Rovio’s offerings, highlighted the feature film as a way of diversification beyond the mobile games, and stressed the brand as a key value proposition.
Authors of the commentary did not appear to have contacted representatives from the company, or taken a deeper look at the operational and financial conditions of Rovio, beyond brief mentions of staff cuts and falling revenue in the beginning. It is convenient to produce a laundry list of recommendations, or to muse about what could have been, yet hindsight is 20/20. What follows are further questions about the feasibility of these proposals. They argue:
– “[Rovio] should perhaps have placed a greater focus on its core skills, with heavier investment in future generations of games and related apps”, but they make no mention of the research and development which may have been invested, based on manpower or resource changes for instance, or present any evidence that the company has not been as effective with its core skills in mobile applications.
– Rovio should have “[secured] licensing deals or tie-ups with companies that already have the experience and capabilities”, but do not balance the costs and benefits of doing so. Expertise from established companies for licensing deals may have been expedient, though there is no guarantee of success, and the tie-ups may be no less expensive too.
– Rovio should “consider recruiting staff from diverse backgrounds to bring a broad range of perspectives to the firm”. To substantiate this point, the authors could have aggregated the profile of the employees, with distinctions drawn across demographics, nationalities, and working styles. What about the recruitment process? Is there information about the procedures?
Likewise, when it is asserted that “[Rovio] should aim to keep their organisational structure as flat as possible”, evidence has to be provided to show that the structure is indeed flat, how the organisation compares to other companies.
Commentaries should inform, and if they aim to be constructive their assertions or suggestions should be backed by greater rigour. This analysis of Rovio, unfortunately, does the company and the authors no justice.