The Angry Birds game producer Rovio (HEL:ROVIO) announced a profit warning on Thursday, leading to a 45 percent share price plunge. The Finnish company reported the revenues for 2018 will be lower than expected, between €260 million to €300 million, due to increased marketing costs which lowered the profit outlook.
Rovio forecast an operating margin at 9 percent to 11 percent in 2018, far from the 14 percent expected. However, during the fourth quarter operating profit was more than doubled to 10.4 million euros on revenue up 17 percent to 73.9 million euros.
The company made no comments, but some share holders expressed their anger. “That guidance is nowhere near the growth they previously talked about,” said a fund manager with Rovio stock which wishes to remain anonymous.Â
Despite, the success of the Angry Birds film, Rovio has experienced a number of disappointments over the past year.
Investors suffered the first setback after the company published its first interim results last November when shares dropped about 20 percent.Â
The game business is has changed dramatically since their IPO and Rovio are struggling to find further success. The rapid growth the company saw from its launch in 2009, has been declining since 2015. According to analysts, Rovio are due a change to their strategy and and avoid the increase in marketing spending, as it is has largely been a waste of money.
In January the company announced they had reached 4 billion downloads across all their games. The games titles include “Angry Birds 2,” “Angry Birds Blast”, “Angry Birds Friends” and “Battle Bay.
“In 2018, Rovio’s games business will focus on continuing development of its live game portfolio. The cost per acquired user has risen significantly in the market,” stated the company.
The full interim results will be published on the 2nd of March. Shares were down 49 percent, trading at 5.06 euros, as of 14:30 (GMT).