Angry Birds ‘Success’ – Popularity at No Price?

We just learned that the latest entry in the bird launching franchise – Angry Birds Rio – has been downloaded 10 million times in the first 10 days. We also recently heard that the franchise as a whole has passed 100 million downloads, and a month ago that the Android version has netted 30 million downloads.

These massive download figures have caused some to make various statements about it being the most popular video game ever, etc. In contrast, between 2005 and 2010 Tetris *sold* more than 100 million cell phone copies. While the difference in time scales is notable, the ‘app age’ really didn’t start until at least 2008. My point here – we have to always be careful comparing games of different eras, especially when one was sold and the other virtually given away.

Here is a statement from Rovio about Angry Birds success:

“Everyone is playing Angry Birds,” said Vesterbacka, as he outlined previously known stats like the game’s 40 million monthly active users, who spend 200 million minutes a day playing the game across various devices.

He was noting how tablets (including smartphones) are greatly outpacing consoles and using Angry Birds as an example. My first thought was ‘no, really’? I mean, console game sales have been stagnant for a couple of years, while the mobile app industry went from zero to a billion dollar market.

It has been interesting to watch the app economy explode – we had some early successes, and then Doodle Jump creating the first app store millionaires, and then Angry Birds coming after that with an apparent business model set up to ensure that a year later we wouldn’t be talking about ‘whatever happened to Angry Birds’.

Show Me The Money

Angry Birds has certainly been successful, as Rovio has reported profits of $70 million from Angry Birds. This from a company that was reportedly on the brink of bankruptcy just two years ago. Those are solid numbers, and there is no doubt that Rovio and Angry Birds are a resounding success.

So what is my point? Well, think about it for a second – 100 million downloads, minus 30 million ‘freebie’ Android apps leaves 70 million paid copies. Assuming a 95%/5% split of iPhone/iPad sales (not unreasonable), then the sales revenues (after Apple grabs 30%) would be ~$58 million.

Of course, $58 million is gross sales, not net profits – which means that even if Rovio was operating at a 70% profit margin they would need to have gotten nearly $50 million in ad revenue from Android, and licensing fees from plushies and t-shirts and so on.

Brave New World

As a contrast, Dragon Age: Origins sold ~4 million copies, at a price of $60 with an estimated $7.20 profit per game – which is about $30 million in profits for that single game. Add in the double profit margin on the $40 million-selling expansion and estimated 75% profits on the average $6 DLC which sold a total of more than four million units, and you have ~$56 million in profits. FOR ONE GAME … and the irony, of course, is that coming out of that EA made it clear that Dragon Age didn’t sell well enough!

My point with that comparison is that while it is all well and good to celebrate the massive achievements of Angry Birds, there are thousands of App Store developers (iOS and Android) learning that the roads are not paved with smartphone gold!

Also, note the figures from Rovio: 40 million ‘monthly users’ and 200 million ‘daily minutes’. That means that of the 100 million downloads, about 40% have played in the last month – and for an average of ~5 minutes each!

Those numbers are SO starkly different from console/PC game numbers that I did a double-take. If you looked at similar numbers for the average PC or console game, especially something a year old, you would see much lower numbers … but still with a higher in-game time. With a popular console game, you would have near-100% play-rates for the first month or so and then significant drop-off from month-on-month from there. But since most games are either long (Dragon Age) or feature multiplayer (Call of Duty), playing five minutes is pretty much the minimum just to get into the game.

I would bet that if you looked at the Dragon Age numbers from January 2010 (two months after launch), the play minutes from the 3.2 million units sold would have exceeded 200 million – which indicates about 70 minutes per gamer. It is another way that the models of smartphone and ‘traditional’ games are different … and why developers need clear business models for their games.

Need a New Model

Rovio’s business model is ‘bi-winning’, to coin a cliche. If Rovio just tossed Angry Birds out there, it would have done well and been long since forgotten. Instead, they put out the game, and with each significant update they actually added content for free. Suddenly the $0.99 seems like even more of a bargain – even if you don’t play! Then they added themed content for nominal fees, and when the ad-supported Android model appeared they hopped on that as well. Brilliant – the game has been out for nearly 1.5 years (since December 2009), and is more popular than ever. The gold rush won’t last forever, and I assume that the recent financing round Rovio just got was to develop more original IP. They have the business model – now they just need more content!

The initial reason that the ’10 in 10′ struck me was … well, I am one of those. Or, two actually as I have it on iOS and Android. However, I have yet to play it. The same is true for all of the Android ‘seasonals’, and I only played the Android version of the main game for about thirty minutes to feel satisfied that the original Droid is far inferior to the original iPod Touch as a gaming device. So I have gotten every release on iPhone and Android (skipped on the WebOS and iPad versions), but all of that amounts to ~$5, and I have absolutely no regrets even if I never play it again. Apple was right with $0.99 for songs, and for a casual game like this, $1 remains a ‘throw-away’ purchase.

What about you? Have you caught the Angry Birds addiction? Do you have versions you’ve never played? How much longer until you see Angry Birds becoming over-exposed?