Comments from CEO, Kati Levoranta:
In the third quarter of 2017, we continued to execute our Games First growth strategy. Revenue increased by 41% year-on-year and amounted to approximately EUR 71 million. In line with our growth strategy, we significantly increased our investments in user acquisition, which predictably led to a decline in profitability. Rovio's successful listing on the Helsinki stock exchange at the end of September was evidence of the strong interest in our growth strategy, also in the capital markets.
Rovio's Games business achieved strong growth in the third quarter. The Games business unit's revenue increased by 40% year-on-year, boosted by the improved monetization of top games. We significantly increased our investments in user acquisition, and at the same time in future revenues, for our top-performing games: investments increased to EUR 22 million in the third quarter, which, as expected, reduced the profitability of the Games business unit for the third quarter. We expect the payback time for these investments to be 8 to 10 months. In August, Rovio launched a new game, Angry Birds Match, which has promising performance indicators and the potential to become one of Rovio's best performing games.
The revenue of the Brand Licensing business saw substantial growth in the third quarter, as expected, rising to EUR 6.7 million mainly on the strength of income related to the Angry Birds Movie. In September, Rovio established a marketing partnership with the English Premier League club Everton to strengthen the local and global visibility of the Angry Birds brand. Movie-related revenue helped the Brand Licensing business achieve a significant year-on-year improvement in profitability.
Rovio continues to improve the monetization of its top games by optimizing user acquisition investments in accordance with a carefully managed process and also by continuously introducing new features to its games. As part of its growth strategy, Rovio is also continuously developing new games, with only those games that pass strict internal assessments being approved for market launch.
Rovio's Initial Public Offering in September 2017 saw the Company acquire more than 11,000 new shareholders and accumulate gross proceeds of EUR 30 million. Rovio plans to use the funds to support its growth strategy. Listing on the stock exchange also enables Rovio to make more transparent use of shares as the foundation of the long-term incentive scheme for personnel.
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