What animal does not have wings or feet, looks mean, and attacks harmless looking pigs, all while costing the inhabitants of our planet 200 million minutes every day? We are, of course, talking about Angry Birds, the mobile game that has been downloaded more than 2 billion times and earned its maker, Rovio Entertainment, $195 million in revenue in 2012. The success of the original game spawned variations featuring characters from the worlds of Star Wars and Transformers and inspired a full feature movie in 2016. How does a company produce such a blockbuster hit? The so-called overnight success of Rovio actually took eight years to achieve, a unique combination of rational, intuitive, and creative decisions, and not an insignificant amount of luck.
The Finnish cousins Mikael and Niklas Hed spent a lot of time talking about video games while growing up. Niklas actually made his first game when he was 12, using the programming language Pascal. When the pair won a 2003 competition organized by Nokia and HP to write a game for an early Smartphone, they decided to start their own business, having little idea how the business would make money, but knowing that this is what they wanted to do. In 2004, they founded their company Relude, later to be renamed Rovio, or “bonfire” in Finnish. A graduate of Tulane University’s business school, Mikael brought the business expertise to this partnership while Niklas was the computer scientist bringing the technical expertise. Mikael’s father Kaj, an entrepreneur who had founded other companies before, later invested €1 million, which resulted in an expansion of the company.
Mikael left the company in 2005, due to disagreements with his father about the company’s future and growth strategy. By 2009, the company was in dire straits, with their once 50-employee office shrunk to 12. Up to this point, they had mainly done work for hire, developing 51 games for big name companies. None of the games they developed were hits, and they desperately needed one.
When Niklas decided to reboot the company, his first act of business was to bring back Mikael, which was a challenge due to the father-son conflict. Once Mikael was convinced to come back on board, the duo set out to outline how they would come up with the perfect game. In the meantime, a key change in their business environment was working in their favor. While in the past there were too many platforms that game developers could choose from, now Apple had revolutionized their business with the iPhone release as well as the iTunes store, so now they could make the game focusing on a single platform and reach a large number of paying customers.
Their criteria for creating a hit game were these: It had to be a physics-based game, which was popular at the time. It had to be easy enough to learn without a tutorial. Users should be able to play it a short while and then put it aside. Loading time had to be brief. It needed an eye-grabbing icon to stand out in the iTunes store. And it needed to appeal to everyone, not just to teenagers, or science geeks, or men, but to all demographics. Keeping these criteria in mind, they started reviewing concepts being pitched to them by their game designers, dismissing them one after the other.
One day in March 2009, their principal game designer brought a sketch of a feetless, wingless, angry-looking bird, and the entire company fell in love with it. Then they started going through iterations to perfect the game. At first the birds were matched to blocks by color, making the game confusing, and leading to the decision to give the birds an enemy. The enemy was a blob that they turned into a pig after the Swine flu epidemic. The question of why the birds were so merciless toward the pigs resulted in the backstory that the pigs had stolen the birds’ eggs. Niklas knew they had a winner when he showed the game to his mom over Christmas dinner and did not get his phone back all night.
The game actually flopped when it was first released in the App store. Realizing that breaking into the U.S. and UK markets would be a challenge, Rovio concentrated on becoming number one in smaller markets such as Finland, Sweden, and the Czech Republic, which gave them leverage to talk to Apple executives and convince them to make Angry Birds the featured game of the week in the UK. They timed this week to coincide with the release of a YouTube video, a free version of the game, as well as a new version adding 42 levels, resulting in the app moving from number 600 to number one. The result is now history, with Rovio building one of the most successful franchises in the world, and earning the mean birds themselves celebrity status. The next game in the franchise, Angry Birds Space, was downloaded 10 million times the first three days it was available.
Case Discussion Questions
- What do you believe is the role of luck in Rovio Entertainment’s success?
- How did Mikael and Niklas engage in rational decision making? Explain.
- Which of the Heds’ decisions may be characterized as an intuitive decision?
- Did the founders of Rovio engage in creative decision making? Explain your answer using examples.
