STOCKHOLM--Finland's Rovio Entertainment Ltd., maker of the
Angry Birds mobile game, said on Friday that Chief Executive Mikael
Hed will step down in January--a move that comes amid the company's
recent struggles to refresh its games lineup and revenue model.
Mr. Hed will be replaced by former Nokia Corp. executive Pekka
Rantala, who joined Rovio's executive team earlier this year.
Rovio and its iconic Angry Birds games franchise has struggled
in recent years amid stiff competition from a new breed of mobile
games developers, such as Supercell Oy and Anglo-Swedish King
Digital Entertainment PLC, the maker of the "Candy Crush Saga."
Mr. Hed, 38, has tried to overhaul the Finnish company's games
revenue model, making downloads free and charging users for
purchases made in the games, but recent games haven't made much of
an impact.
In a recent interview with The Wall Street Journal, Mr. Hed said
that the company's efforts to transfer its business from a
pay-to-play to a free-to-play model has taken longer than it first
anticipated and acknowledged that its most recent games haven't
been financial hits.
In 2013, the closely-held company booked EUR156 million ($205
million) in revenue, up slightly from EUR152.2 million in the
previous year. Net profit, meanwhile, fell sharply to EUR26.9
million in 2013, less than half the EUR55.5 million it made in
2012.
Almost half of Rovio's revenue is made up from licensing income
from the Angry Birds brand. Rovio has struck multiple merchandise
deals with companies such as Hasbro Inc and Sweden's clothes
retailer Hennes & Maurtitz AB to sell a raft of consumer
products, such as hoodies and toys. There are also several Angry
Birds-themed attractions in operation around the world.
Despite flattening revenue and falling profits, Rovio has
continued to expand its business and add head count. Its workforce
grew to more than 800 by the end of last year, from about 500 the
year prior. Video and animation operations were ramped up to
develop a forthcoming animation movie based on Angry Birds
characters.
The movie marks the largest individual investment Rovio has
made, and is being financed and produced by the Finnish company,
with distribution by Sony Pictures Entertainment. It's scheduled to
hit the big screen in 2016.
Rovio said Mr. Hed will continue at the company. Chairman Kaj
Hed, the father of Mikael, has nominated him to the company's board
of directors and appointed him as chairman for Rovio's animation
business.
Mr. Rantala, Rovio's next chief executive, has worked as a
longtime executive at Nokia, where he led some of the company's
marketing operations. Before joining Rovio, Mr. Rantala worked at
Oy Karl Fazer AB, a Finnish food and candy company.
Write to Sven Grundberg at sven.grundberg@wsj.com
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