Remember Angry Birds? Well, the makers of the game just severely disappointed investors with its first-ever earnings report as a public company.
On Thursday, shares of Rovio Entertainment (HI: ROVIO) plummeted 20% to trade at €9.45, or $11.20, on the Nasdaq Helsinki.
In the results, the Finnish gaming company disclosed that sales were up 40% in Q3, but costs also increased significantly, with €22.2 million, or $26.3 million, being spent in an attempt to attract new users. As a result, the increase cut into the firm’s profits.
Angry Birds might still be an extremely popular game, but that didn’t stop Rovio Entertainment from reporting a €500,000, or $600,000, loss before tax in the quarter, which compares to earnings of €4.6 million, or $5.4 million, in 2016.
As one might have guessed, investors were not happy with these results. However, Jack Kent, analysts at IHS, said the Finnish gaming company was right to invest in a drive to bring in new users.
“Such a move is necessary for Rovio’s long-term strategy to improve the overall monetization of its games, [an] area in which it had lagged behind its rivals despite strong download success,” he said.
Featured Image: twitter
