Make people download it and think about money later (Angry Birds)

By: ispeculatornew
Date posted: 12.03.2010 (4:14 am) | Write a Comment  (4 Comments)

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I always find it interesting when I hear about how ridiculous giving away free content or free games is. But sometimes, the key is building a solid product that will attract users and then provide good opportunities for growth in sales. I think one of the very interesting cases has been “Angry Birds”, a game that was developed for the Apple products such as the Ipad. The game is simple but fun. You have different tasks to complete and you accomplish those by throwing birds at pigs. It’s part of what is now described as a war between Angry Birds and Pigs. The game does make some revenues through sales of its $4.99 HD version but that is hardly enough to make it a financial success.

Make a great product and people will come

The maker of the game decided to build mostly based off of the popularity of the game instead of charging a high price. It build a game that is easy to hype thanks to a catchy concept and that attracted the masses. At that point, it would have been easy to let the game go (stop working on it) or to rise the price as many other games have done. But instead they decided to focus on getting more users. How? By making the game even better and keeping the very low price.

It might even offer it for free next time…

I think that if I was working on a game and had a similar plan, I would make the game almost free. Why? Because the benefits of charging for the game are important but they are not the big picture. The objective is simple: Build a name and a following.

Is this 1999 all over again?

You certainly remember how the early 2000s were marked by dot com companies that were able to attract huge valuations without generating any revenues. They were building websites that attracted visitors but there was no money coming in and investors that bought the concepts ended up getting screwed badly. How? Let’s just say that at some point, some investors started noticing that these companies had no current revenues or profits and no way to actually make money either. And there is where lies the big difference with Angry Birds. It was not building a big game in terms of revenues but it was working on something much more powerful…

Building a franchise

In a just a few months, Angry Birds has something much more powerful than a few sales at 20-30$ Angry Birds is now a world phenomenon and will be distributed on the XBox, Playstation, the Wii. There are also world gatherings for Angry Birds fans,  an Angry Bird World day, viral Youtube hits, stuffed animals on sale this Christmas, etc. There are even rumors of an upcoming movie to be made. Just take a look at this video which has been millions of times in just a few days. All of these initiatives are signs of how powerful the franchise has now became and money can now be made off of the franchise.

Warning to Non players of the game: You will not get this video at all:)

The lesson

I think that even in this environment of short term profits, companies like Rovio are the types of companies that will do well over the long term. It’s not always about short term profits and gains. MySpace was the exact opposite example. After being purchased by News Corp, it stopped building long term opportunities and focused on short term profits…

It is easy to dismiss companies that do not make revenues or profits as irrelevant but I think we have to remember that they might have a longer term plan. It is important for a plan of future revenues and profits to exist but that can be significantly down the road.

I think a company like Google, which continues to focus on product quality and innovation will be served by its attitude if it can keep all of its products at a higher level than the competition. Facebook is another company that is probably an even better example. It has been able to keep up the innovation and focus on its product first and on revenues second.

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  1. Comment by VeRo — December 3, 2010 @ 7:37 am

    Good post! Never played the angry birds, but I thought the video was very funny! Do you think long-term revenues more applies to online businesses?

  2. Comment by IS — December 5, 2010 @ 10:27 am

    @VeRo – yes I think that the online business is and should be the main focus and will be the revenue driver

  3. Comment by Catarina — December 6, 2010 @ 10:02 am

    hahaha loved that video! thanks for sharing!

  4. Comment by IS — December 6, 2010 @ 9:07 pm

    @Catarina – You are more than welcome:)

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