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Rovio, the company behind the insanely successful Angry Birds game, is not planning to launch on the stock market next year as some had previously reported — but will instead aim for a listing on the Hong Kong exchange in 2013.
In an interview with Finnish magazine T&T, excerpts of which are online, Rovio’s marketing boss Peter Vesterbacka says that reports of an IPO in the next 12 months were “a misunderstanding” and that the company would go public after a longer period of planning.
In addition, he said that the company wants to grow to more than a billion users, and reach the size of Disney.
“We will be the first entertainment brand with a billion fans,” he told T&T. “That target sounds like a lot, but we are growing faster than Facebook, Google, YouTube or Skype. Disney is worth $60 billion… that is our goal, and there is no reason we couldn’t build a company that size.”
Rovio is certainly talking a good game: downloads are increasing all the time, the business is licensing heavily, expanding into new markets and trying to into a multimedia. In addition its focus on China — aiming to become the most popular entertainment brand in one of the world’s fastest growing markets — it is buying up properties to push forward with projects such as animation and TV.
Plus it has a serious war chest, having raised $42 million of investment earlier this year which it could use for further expansion or acquisition on its way to a possible IPO.
But that growth money has to take the company somewhere significant — and that’s the reason that Rovio is specifically looking to emulate Disney is not cultural impact, but the bottom line. In the interview Vesterbacka lays it bare: “Toy sales are more profitable than the gaming business,” he says. “The goal is to exceed the number of Mickey Mouse toys that Disney sells.”
This sentiment is interesting to me, because it feels increasingly like the business is at a turning point. I have written before that I am skeptical of Rovio’s reliance on Angry Birds — a single franchise in a world where they can come and go very quickly.
There is no doubt that the company has a hit of huge proportions, but the history of single-brand franchises is not great from a global perspective. If Vesterbacka is indeed taking his lessons from Disney, then he should be looking to broaden the company’s range far beyond Angry Birds and into all sorts of new areas.
Remember, Walt Disney toiled for several years until he produced a hit in Mickey Mouse — but even when he had a smash on his hands, Disney didn’t stop there. Instead he used the popularity of the Mickey Mouse cartoons to take his company to the next level, challenging himself and his staff with Snow White and the Seven Dwarfs, the first full-length animated feature.
It was the profits from that film — from that innovation — that really helped the company to become a seriously big deal.
Nowadays, while Mickey Mouse is synonymous with Disney and a significant part of the company’s business, it is not (around a third of the $28 billion of Disney toys sold last year were Mickey-related). If Rovio pushes ahead with an IPO, it will be worth watching to see what their long term plans are.