Angry Birds and the battle for consumer hearts
by Arthur Goldstuck Most of the 67 000 delegates to the recently held Mobile World Congress in Barcelona were there to make business decisions about their future investments in smartphones, tablets and other mobile devices and applications.
Angry Birds Rio, the game that inspired the movie of almost the same name (Rio), was named Best Mobile App for consumers. WhatsApp, the big new contendor for the instant messaging crown, got the gong for Best Overall Mobile App. One traditional name did elbow its way into the consumer awards, with Google Maps for Android named Best Consumer Mobile Service.
The difference between Google and the other two winners, however, is that the latter had to pull themselves up by their own virtual bootstraps. Both are success stories on different levels, and offer many lessons for start-ups in the high-tech places.
Take Angry Birds. It has been downloaded more than 500-million times, and brought in $100-million revenue in 2011 for its creator, Rovio. How does it do so well for a game that everyone is downloading for free?
It follows the classic freemium model, where a basic version of the game is free, and the premium version has a modest price tag. The price is low enough to be compelling to fans of the game, but high enough to add up to serious income when downloads go through the roof.
The second secret is that Rovio keeps building on the experience, by producing sequels that advance the internal story of these annoyed avians, and adds both interest and complexity. The games first became popular via phones running Apple’s iOS or the Android operating system. But now Angry Birds, Angry Birds Seasons and Angry Birds Rio are also available for Windows Phone, the Blackberry PlayBook tablet and some Nokia handsets, meaning an ever-wider market. This compares to the typical phone-based game being made only for Apple and Android devices in the USA.
The consequence of this ever-expanding user base is that Rovio’s 2011 revenue was a tenfold increase over its income for 2010, when it was also limited to those two device categories.
Of course, the true basis of Angry Birds’ success is just how compelling the games themselves become, but then that’s no secret.
WhatsApp borrows partly from the same kind of thinking that is apparent at Rovio, as well as from its main rival, BlackBerry Messenger (BBM). BBM’s popularity is based not only on the low cost of high-end smartphones and unlimited data on the BlackBerry Internet Service, but also on sheer usability. Aside from being easy to use, BBM is also fun, with a range of emoticons, or smileys, that add enormously to the meaning and enjoyment of instant messages.
WhatsApp draws on this same appeal, with its own equivalent smileys, along with a wide range of themed emoticons. The real power of WhatsApp lies in the fact that it can be downloaded and used on any smartphone brand in the world, including older Nokia phones using the Symbian operating system: the most popular phone operating system in Africa.
WhatsApp also has a South African connection: it’s main outside investor is Silicon Valley venture capital firm Sequoia Capital, where a senior partner happens to be Roelof Botha, grandson of former South African foreign minister Pik Botha, and once the youngest actuary ever in South African history.
WhatsApp won’t reveal download or revenue figures, but Sequoia’s $8-million investment in the company before it was two years old suggested its potential. In South Africa, it is fast becoming an alternative to BBM and MXit.
MXit remains the big daddy here, with around 10-million users in South Africa. However, the instant messaging scene has become fiercely competitive, with 2GO and ZING also arriving as strong SA alternatives. 2GO has picked up 5-million local users in the past six months, and is building a huge customer base in Nigeria, the biggest mobile market in Africa.
WhatsApp wants some of that, too, and we can expect a titanic battle for the consumer heart in 2012.