Rovio, which is listed on Finland's main stock exchange in Helsinki, forecast that its 2018 revenues would likely sink below the previous year and profits may dip as well as user acquisition costs have gotten higher and the future has become more uncertain.
Rovio, the developer and publisher of the smash hit Angry Birds franchise has lost 500 million in value in the last day.
The company got a big boost from "The Angry Birds Movie" in 2016, which grossed almost $350 million in ticket sales worldwide, according to Box Office Mojo.
However, Kent pointed out that the share of revenues from Rovio's licensing business is falling.
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Rovio fourth-quarter net sales of €73.9 million euros ($90.7 million) missed the lowest of three estimates compiled by Bloomberg.
Rovio, maker of the Angry Birds mobile phone game, warned that its revenue could fall by up to 12 per cent this year, sparking a sell-off yesterday. The company said it expected operating margins to widen to 11% in 2018, up by 0.4% from past year. Revenue grew 55% to €297.2 million in 2017 from a year earlier. Margins will be affected by an investment in the subsidiary company, Hatch - a Netflix-like service that gives users the ability to instantly stream a range of mobile games without having to download them. But investors have always been anxious about Rovio's ability to churn out new hit games and absorb the high cost of getting new users.
Under CEO Kati Levoranta's leadership, the group has managed to diversify incomes most notably through "The Angry Birds Movie", which raked in $350m at the box office. In 2016, Rovio headed up again with the help of the movie "Angry Birds", followed by an IPO that valued it at 1 billion United States dollars.
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