Rovio Entertainment shut its London office a little over a year after opening it as Q4 revenue fell short of analysts’ forecasts.

Rovio’s Q4 operating profit more than doubled €10.4 million in Q4 ended Dec. 31 on a 17% gain revenue to €3.9 million. But the revenue was short of analysts Q4 estimates for €77.3 million, something executives blamed on a decline in revenue from Angry Birds Evolution (€9 million, down from €10 million in Q3) and Battle Bay (€4 million, down from €5 million). Revenue from the Angry Birds 2 game, which was released in 2015, rose 25% to €20 million.

Q4 brand licensing revenue fell 53% to €8 million, amid slowing sales of Angry Birds film-related products. Film-related revenue will fall another 40% this year as the company focuses on building a licensing program for the Angry Birds  movie due in September 2019, CEO Kati Levoranta told analysts.

The revenue shortfall was tied to heightened competition from other mobile games in Q4 which drove an increase in cost per installation (CPI), executives said. The number of daily active users of Rovio games also declined to 9.5 million in Q4 from 13.5 million in Q3, Rovio said.

Meanwhile, the company is undergoing another round of restructuring, announcing it will shut down its London development studio a little over a year after opening it. The studio, which has seven employees, was formed to create massively multiplayer online (MMO) games with plans for a staff of 20. Work begun there will be moved to Rovio offices in Stockholm, Sweden and Espoo, Finland, Levoranta said. Rovio cut 213 jobs in 2015, but appeared to have stabilized following Sony Pictures Digital Productions’ release of the Angry Birds film a year later.

Rovio also forecast an increase in development costs to €10-15 million euros this year for its Hatch Entertainment cloud-based streaming game service, which has signed up 100 developers for about 250 games and is being tested on Google Play in 16 countries. It spent about €5 million on the service in 2017.

Contact:

Rovio Entertainment, Rene Lindell, Chief Financial Officer, +358 207 888 300, rene.lindell@rovio.com.