Angry Birds movie boosts slack sales in video game

The world will soon know if the Finnish creators of the Angry Birds franchise are foolish gamblers or brilliant strategists, as an all-or-nothing movie that cost them $173 million to develop and market opens in China and the U.S.

“The Angry Birds Movie” has already pulled in $43 million since its May 13 debut in Europe, Russia, and South America. With its release in China and the U.S. on Friday, executives at Rovio Entertainment are eager to show doubters just how wrong they were when box-office tallies roll in.

“This is an enormous opportunity for us to grow the game company into more of an entertainment company,” Alex Lambeek, Rovio’s chief commercial officer, said after returning to Europe from a marketing blitz in China ahead of the local premiere.

The movie is already stimulating game downloads. Its afterglow could open a slew of additional opportunities, from merchandise sales to sequels and cartoon spinoffs. “All options are on the table,” Lambeek said.

Closely held Rovio, the Espoo-based maker of more than a dozen Angry Birds mobile games, could use a good tailwind. While its titles have been downloaded more than 3 billion times since 2009, waning interest has slowed sales of merchandise - from ice cream and soda pop to bed sheets and wall stickers - and led to job cuts.

Analysts scratched their heads when Rovio’s founders announced the movie in 2012 and pushed forward with the plan even amid losses and falling sales. Rovio’s revenue in 2015 was about $160 million and its operating loss about $15 million.

“Usually companies don’t take this kind of insane risk,” said Tero Kuittinen, a New York-based analyst who has followed Rovio over the years. “Everybody thought it was madness to do this movie because if it flops it could put Rovio out of business.”

The film is forecast to generate $39 million in its opening weekend in the U.S. and Canada, potentially challenging Walt Disney.’s “Captain America” for the No. 1 spot, and $137 million in its entire North American theater run, according to BoxOfficePro.com.

Jeff Bock, senior box-office analyst at Exhibitor Relations, forecasts total global ticket sales of about $300 million, a sum that will be split with theater owners. While that’s not enough to turn a profit for Rovio before the movie goes to DVD, video-on-demand and TV, it is likely sufficient to generate a sequel and spur revenue from consumer products.

“Box office isn’t the final answer,” Bock said. “It is more about mass merchandising.”

Rovio spent $73 million producing the movie, opting out of the more common path of licensing its brand to a studio. The company also pledged about $100 million to cover distributor Sony’s marketing costs.

Bloomberg