According to MediaBrix, social and mobile-gaming ads draw the highest engagement rates of any advertising, at 20 per cent.
This has certainly paid off for Rovio. In 2011, the Angry Birds creator grew year-on-year revenue by 963 per cent to US$106.3 million. Annual results released in May 2012 indicated that its primary revenue streams were in downloads, advertising and consumer products. Its strongest performing sector, consumer products, which includes merchandising and licensing income, generated revenues that represented about 30 per cent of total revenue in 2011.
On 16 March, Rovio will be extending its franchise to a video network via its video games, which have been downloaded more than 1.7 billion times, as well as select video-on-demand channel providers, smart TVs and connected devices.
The network will screen the Angry Birds Toons animated series, which, according to Mikael Hed, CEO of Rovio, will tell the backstory of the Angry Birds and the Bad Piggies.
Each week, fans will download updates to their Angry Birds apps which will unlock a new channel button in the game homescreen starting on 17 March. In addition, the channel will be available in Asia on FOX8 in Australia, JEI TV in Korea, ANTV in Indonesia, and Cartoon Network in India. Rovio is partnering with Activision, Paramount Pictures, BlackBerry, and Sony Pictures to launch the channel.
In anticipation of the launch, Rovio established brand ad partnership teams in Asia-Pacific and EMEA in February. However, when contacted by Campaign Asia-Pacific today, Henri Holm, senior vice-president of Rovio Asia, declined to comment on opportunities for advertising and brand partnerships via the new network in Asia, referring questions to Rovio headquarters in Finland.
The advertising and brand partnership business model is particularly important for game developers in Asia's developing marlets, commented Manish Agarwal, CEO of Reliance Entertainment Digital. "In markets like India, in-app purchases are still in the nascent stage and a more important revenue source for us are the brands."
According to Agarwal, Reliance owns India's largest online casual gaming destination and has been focusing more on mobile gaming in the past year. Advertisers, he said, are interested in working with Reliance because the mobile-gaming platform reaches the more remote parts of India, where wired internet access has yet to reach.
"Plus, we are a gateway to India's fragemented mobile-platform environment," he said. "Brands are unsure how much to commit to developing their own presence across all platforms." So far, Reliance has worked with brands from sectors that include FMCG, automobile and finance, to develop in-game content and even mobile games.
To further build out its mobile gaming empire, Reliance Big Entertainment's mobile gaming business, Reliance Games, has fully acquired the gaming division of Funnel Japan, forming Reliance Games Japan. In addition, the company bought a majority stake (51 per cent) in Korean gaming studio Bluesom.
According to Reliance, the acquisitions will give Reliance direct access to the two largest mobile-gaming markets in the world. The company aims to adopt a two-pronged approach to the new setups; while the Japanese and Korean facilities will develop IP (intellectual property) targeted to local consumers, they will in future also be responsible for R&D of multiplayer mobile games for the western markets.
"With this acquisition in Japan and Korea, Reliance Games has made inroads into the world’s largest mobile-gaming markets and looks forward to tap the US$5.5 billion and $1.3 billion mobile-gaming markets of Japan and Korea, respectively," said Agarwal. "Investment in the development studio at Busan, Korea, and in the distribution team at Tokyo, Japan, will enable us to develop games for local markets, instead of trying to force fit western games in these markets."
The company has also brought on board Hwa Seok Choi in the role of chief revenue officer for Reliance Games Japan.
While reliance has no immediate plans to export its brand partnership and advertising model to these new markets, where in-app purchases and downloads drive game developer income, Agarwal has plans to do so in the long run.