By Kurt Wagner, reporter
FORTUNE -- Mobile game publisher Chillingo knows how to pick a winner. Founders Chris Byatte and Joe Wee were the first publishers to stumble on Angry Birds, created by Espoo, Finland-based Rovio, back in 2009. With Chillingo's help, the game grew into a $1 billion franchise spawning numerous spinoffs. Then in 2010 Chillingo published Cut the Rope -- arguably the second-most successful mobile game to date.
Mobile gaming shows no signs of slowing down. Sales of games such as Bad Piggies and Letterpress reached $9.7 billion in 2012, according to Gartner. But identifying hits in a burgeoning field of so-called indie developers is no easy task. Traditional game companies have struggled to adapt to changing tastes and technologies, which has only complicated the sometimes nebulous process of finding mega-hits. What's more, developers are increasingly choosing to forego formal relationships with mobile publishers, selling them directly to gamers over the Internet or through digital storefronts such as Valve Software's popular Steam as well as funding projects through Kickstarter. (Rovio, for example, began self-publishing its titles after its initial partnership with Chillingo lapsed.)
That has only made Chillingo more unique, argues Bernard Kim, senior vice president of social and mobile publishing at Electronic Arts (EA). "What folks like EA and Chillingo can provide are massive market insights," he says. "[Insights] turning what could be a B-minus game into an A-plus title before it gets to the marketplace." EA bought Chillingo in 2010 for $20 million. Chillingo, which is based in Macclesfield, England, sifts through thousands of submissions and pitches per year, aiming to bring at least one new game to market per week. Co-founder Joe Wee says the process is a hunt for quality.
Developer-publisher relationships in mobile games operate similarly to those in the book industry. An indie developer who chooses to partner with a well-known publisher like Chillingo receives promotional support as well as a stamp of approval with gamers, says Kim. Because Chillingo has a strong eye for talent, that approval can go a long way, says analyst Michael Pachter. "They certainly have more big hits than anyone," he adds. "It's sort of like, what is it that Steven Spielberg does differently to a movie and what does Martin Scorsese do differently as a director? [Chillingo] just has that sense of what's going to work." To date, Chillingo has published 12 titles that have reached No. 1 on the mobile gaming charts.
So how much is a "Steven Spielberg" of mobile game publishing worth? EA appears to have struck gold with its paltry purchase price, a steal according to multiple analysts. (Just one week earlier, Japanese mobile company DeNA, Inc. purchased developer/publisher Ngmoco for $400 million. Last year, Zynga's (ZNGA) $100 million acquisition of OMGPOP, maker of Draw Something, was widely seen as a mistimed mistake.) Mobile gaming consultant Kevin Dent believes that Chillingo could have fetched a similar price tag if it had waited just a year or two longer. "In terms of mobile, it was the second-best buy in the history of the industry," he says. Chillingo remains part of EA's larger mobile gaming outfit, which includes other publishers like PopCap and Firemonkeys, Australia's largest game studio.
In addition to spotting some of the industry's most profitable titles, Chillingo is trying to transform the gaming business model, says Dent. Publishers previously offered developers large paydays up front in exchange for keeping higher revenue percentages once games hit the app market. Chillingo does the opposite, shelling out little money up front and allowing developers to keep the lion's share of revenues. This has given developers more control, and Chillingo has acquired a strong reputation as a publisher developers wanted to work with, says Dent. It hasn't taken long for others to follow suit. "Everyone in the market now basically followed Chillingo's lead," he adds. Still, there is no guarantee the company can reproduce its outsized hits.
The publisher is also trying new approaches. This month, the company outlined a partnership with Samsung, which launched a "100% Indie" campaign aimed at bringing more developers to Samsung Apps, the phone maker's app marketplace. Developers that launch in March on Samsung Apps will receive 100% of revenue for the first six months on the platform, racheting down in 10% intervals until reaching an industry standard of 70% of revenue after two years on the market, says Byatte. The program is intended to encourage indie developers to bring their games to market without fear of losing out on revenues. "We actually want a platform that allows us to give back to the community," says Wee, "to act as mentors to gamers, to inspire them, and to create content."
Think the popular game has peaked? These astonishing stats may make you think twice.
FORTUNE -- Angry Birds is the game franchise that just keeps on giving.
Some wonder whether the casual video game's popularity has peaked. Rovio's General Manager for North America, Andrew Stalbow, thinks otherwise. Today, Stalbow revealed that there have been 350 million Angry Birds downloads since the game's launch in December 2009. PLayers are putting in an astonishing 300 million MOREJP Mangalindan, Writer - Sep 12, 2011 2:24 PM ET
Mobile games are just one wing of Rovio's plans for a global entertainment empire.
By Stacy Cowley, CNNMoney tech editor
FORTUNE -- Here's a fun stat: The 300 million players who have downloaded Rovio's Angry Birds games have flung more than 100 billion avians -- more birds than actually exist in the entire world.
"Our goal is to be the first brand with a billion fans," Peter "Mighty Eagle" Vesterbacka, Rovio's chief marketing officer, MOREJul 21, 2011 1:17 PM ET
Rovio has a blockbuster franchise just as notable for its flock of revenue streams as its wildly addictive game play.
FORTUNE -- You don't have to try very hard to spot Angry Birds in their natural habitat -- online -- because they are as ubiquitous as a Manhattan pigeon.
Since launching as an iPhone app in December 2009, the franchise has been downloaded 200 million times -- double the number reported just MOREJP Mangalindan, Writer - Jun 3, 2011 12:33 PM ET
Android Market's new competition will get a big name game at its opening.
Rovio has distributed an incredible 30 million copies of ad-supported Angry Birds in the Android Market to date. But Rovio is turning to the Amazon (AMZN) Appstore for their new paid application, Amazon Rio. The decision is an interesting one and should also serve as a wake up call for Google's Android Market.
There have been concerns among paid MORESeth Weintraub - Mar 14, 2011 10:30 AM ET
A curated selection of the day's most newsworthy tech stories from all over the Web. Sign up to get the newsletter delivered to you everyday.
LinkedIn unveiled a slew of new features during a webcast including "InMaps," which presents a visual map of your relationships and connections, pages called MOREJP Mangalindan, Writer - Mar 11, 2011 6:40 AM ET
The quirky game has been downloaded a million times per day on Android over the weekend.
If there was ever a question of Google's Android being a viable gaming platform, RovioMobile's release of the full version of Angry Birds may have answered it. On Saturday and Sunday, Rovio distributed a million of their Angry Birds apps for Android through GetJar and then the Android Market. They added another million on Sunday.
Rovio gives Angry MORESeth Weintraub - Oct 18, 2010 10:04 AM ET
|China factory activity contracts in May|
|Japan stocks plunge on weak China data|
|China and Fed fallout to weigh on stocks|
|Tesla repays federal loan nearly 10 years early|
|How police can find your deleted text messages|