Should Rovio prioritize developing new Angry Birds games or diversify into other game genres to expand our audience?

Introduction

The key trade-off we're examining is whether Rovio should prioritize developing new Angry Birds games or diversify into other game genres to expand our audience. This decision involves balancing the strength of an established franchise against the potential for growth in new markets. I'll analyze this trade-off by considering our current market position, user base, and long-term strategic goals.

Step 1

Clarifying Questions (3 minutes)

• Context: I'm thinking about Rovio's current market position. Could you share some insights on our market share in the mobile gaming industry, particularly for casual games?

Why it matters: Helps assess the potential for growth within and outside the Angry Birds franchise. Expected answer: Significant market share in casual games, but facing increased competition. Impact on approach: High market share might suggest focusing on retention, while low share could indicate opportunity for expansion.

• Business Context: Based on our revenue model, I'm assuming Angry Birds games are a significant contributor. What percentage of our revenue comes from Angry Birds versus other titles?

Why it matters: Indicates the financial risk of diversifying away from our core franchise. Expected answer: Majority of revenue from Angry Birds, but with declining growth. Impact on approach: High dependence on Angry Birds would necessitate a more cautious diversification strategy.

• User Impact: Considering our user segments, I'm curious about the demographic breakdown of our Angry Birds players versus the broader mobile gaming market. How do they differ?

Why it matters: Identifies potential untapped markets and informs targeting for new games. Expected answer: Angry Birds skews towards casual, family-friendly audience. Impact on approach: Large gap between our audience and market could suggest opportunity in new genres.

• Technical: Given our expertise in physics-based games, I'm wondering about our technical capabilities in other genres. What's our current capacity for developing different types of games?

Why it matters: Assesses feasibility and resource requirements for diversification. Expected answer: Strong in casual games, limited experience in other genres. Impact on approach: Limited capabilities might suggest partnerships or acquisitions for diversification.

• Resource: Thinking about our development teams, how are they currently structured? Are they specialized for Angry Birds or flexible across genres?

Why it matters: Determines our ability to quickly pivot to new game development. Expected answer: Teams primarily focused on Angry Birds, with some flexibility. Impact on approach: Highly specialized teams might require restructuring or new hires for diversification.