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Rovio in Decline
2014-10-02 22:49:02 -0400
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games Rovio

Wait, someone didn't see this one coming?

Angry Birds maker Rovio is laying off 16% of its staff, admitting that the company’s headcount had swelled based on ‘assumptions of faster growth than have materialised’.

They IPO'ed on the back of one successful video game. People on Wall Street bought stock in the company based on that. What were any of them thinking?

The app-based video game market is basically a lottery. You can game the system (ironically) to get better results, but it's still a long shot that any one game will hit anywhere near as big as Angry Birds. To invest money in a company thinking that they'll be able to repeat that success is pure folly.

Granted, Rovio isn't nearly as evil as Zynga or anything. They didn't steal their games. (Oh, and hello to King Candy there, too, while we're at it.)

But an IPO for a game company with one success on its resume? That's pretty stupid.

Yes, Minecraft might be the exception to this rule, but for a whole host of reasons that make it different from any game app maker trying to make money by giving away its game and then tricking people into spending big money on add-ons.

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