Record quarterly revenue for Games and high profitability
Kati Levoranta, CEO:
We had an eventful Q2 and continued delivering on our strategy on multiple fronts. We reached record high Games revenue driven by the strong performance of our key games. Our profitability improved significantly year-on-year due to lower user acquisition investments and higher games gross bookings. The strong profitability led to the highest operating cash flow since Q418.
In June, we launched a new narrative puzzle game called Small Town Murders. Our aim is to scale up the user acquisition of the game gradually. Rovio’s largest game, Angry Birds 2, grew quarter-on-quarter thanks to game updates, seasonal events and increased player engagement that can be attributed to Covid-19, especially in April. The overall impact of Covid-19, which was visible in a higher level of downloads, daily active users and player engagement, peaked late April. From May onwards these KPIs started to normalize. At the same time, successful game improvements have led to somewhat higher monetization compared to the beginning of the year and stable revenues in our key games.
During Q2, we released news regarding two new Rovio game studios. First, we set up a new studio in Montreal, Canada headed by Ben Mattes, a gaming industry veteran with broad experience from both console and mobile games. In 2020, we are building up the studio’s core team, who will be initiating forward-looking projects around the future of gaming. In June, we announced the acquisition of a Copenhagen based RPG studio Darkfire Games, now named Rovio Copenhagen. The studio has already one game in soft launch and the team strengthens our RPG genre mastery. M&A continues to be an integral part of our strategy and during Q2 we strengthened our leadership team by appointing a new Head of Corporate Development, Jakob Longer, to drive Rovio’s M&A strategy.
During the first half of this year we have seen heightened viewership and engagement for Angry Birds content across all major digital platforms. As an example, The Angry Birds Movie 2 was amongst the most watched movies on Netflix during the spring. In June, we signed a contract with IMG Licensing Worldwide for exclusive global representation of Angry Birds consumer products and location-based entertainment licensing. With their extensive global operations, supported by front and back office resources across geographies and product categories, we believe IMG can help us build an exciting offering over the coming years to reach our fans with high quality consumer products across the globe.
During these exceptional times we have successfully managed the transition to working from home. Going forward we will carefully follow how the pandemic situation develops and adjust our ways of working accordingly. I would like to express my gratitude to all Rovians and our partners for their tremendous efforts and adaptability.
Link to full report here.