So I downloaded Rovio's Angry Birds Space yesterday. The franchise has all the makings of a shark jumping moment — a successful run at the top of the app charts for over a year, three Angry Birds games, plush toys, a recent sag in the charts and a new game release that features a purple vortex sucking the birds into space.
But you you know what? It's delightfully refreshing. I haven't played the original game in awhile, but this new title captures the simplicity of the first series and throws in some new game mechanics. It has the same magic of the original with a whole new twist. No wonder it quickly jumped to the top of the app charts within a day.
With such success, it raises the question — can Rovio keep this momentum going? The company seems to have the will and focus to stick around. It's a nice story to see unfold considering the company has had over 52 unsuccessful software titles before hitting it big with Angry Birds. Rovio wasn't an overnight success.
Huge Software Companies Seem to Die a Quick Death
The software industry is still relatively new and the progress we've made over the last couple decades has accelerated innovation. But with exciting innovation, most software and online services seem to bite the dust relatively quickly. And these aren't small players — companies like MySpace and Yahoo, once prized companies, have faded. Friendster, AOL, and Digg are all examples of companies that started with a single product, but lost their way.
Building the next Coca-Cola or Ford brand online is hard to imagine. However we're still very early in the history of the commercial software industry. If you look back through history, there were hundreds of cola and car manufactures that eventually consolidated into a handful of successful companies. Coca-Cola has over 500 brands in 200 countries, but most of these have been bought through acquisitions.
Another example is Nokia. It originally started as a paper company in 1865, but in a series of business moves over decades, it got into the business of rubber books, telephone cables and electricity. Older markets faced the same problems software companies face today.
The Internet Accelerates the Life or Death of a Company
Companies like Zynga may shed some light on how quickly a software company needs to adapt to stay relevant. Their $180 million acquisition of OMGPOP, a company that only recently had a hit within the last 5 weeks with Draw Something, seems pretty irrational on the surface. But Draw Something's 15 Million daily users isn't something to sneer at. Maybe acquisitions like this are how companies will have to adjust to quickly changing markets.
After all, billions of people are connected via the internet and the speed at which software trends travel is incredibly fast. Zynga needs to stay out in front of the next big thing. That's because its current blockbuster games aren't insurance that it will be able to use them as leverage to gain market share.
Whereas Angry Birds is still in the early stages of growth, but the game's rapid acceleration into a global brand has Rovio needing to quickly make business decisions that will keep the company literally in the game.
To Sell or Not Sell Angry Birds
Logic would dictate that Rovio should sell Angry Birds at the height of its fame. Pundits say it's a huge payday for a successful run in the charts. Many analysts seem to also agree, but the company has been steadfast in its focus to grow the brand. Rovio reportedly turned down a $2.25 billion offer from Zynga last year.
Selling a company or product isn't just a financial decision, but it's a large part of the equation when you have investors looking for an exit. The public markets can be brutal and filled with regulatory bureaucracy and push would-be company builders to bail under pressure. Every business decision is put under scrutiny, just ask Zynga. Rovio's leadership will have to continually ask themselves these questions, at least as long as their company stays relevant.
Company Leadership is the Key
It takes a combination of skills, strength and foolishness in leadership to keep a company functioning. Many mistakes happen. Markets change and evolve. Successfully growing a company requires steadfastness and a bit of luck. I've been doing it for 15 years and the challenges don't go away, they only evolve into new problems to be solved. Leaders have to want to continue to face new threats every day.
A large software company like Facebook is a great example of a company that has a leader, Mark Zuckerberg, who is willing to take those chances. Survival is a complex game that the leaders of a company make look simple. In fact, Andy Grove suggested that only the paranoid survive. It's not fully clear yet what type of leaders Rovio has on their team.
Customers will most likely dictate the survival of Angry Birds, but Rovio's existence as a company will come down to the leaderships' desire to drive and evolve the business. In any case, it'll be a fun ride to watch.
Editor's Note: Interestingly enough, a couple of days after we wrote up this article, Rovio announced that it was acquiring Finland-based Futuremark Games Studio, which Techcrunch says shows that there is consolidation happening in the mobile game sphere right now.
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