Angry Birds Creator Hopes for a Happy IPO
Rovio -- developer of the wildly popular game Angry Birds -- is discussing a 2012 IPO. But the company needs more than one mega-hit to stay ahead of the game.

One of the biggest beneficiaries of Apple’s (NASDAQ:AAPL) iPhone is Rovio Entertainment. Based in Finland, the company is the mastermind behind the hugely popular game Angry Birds. Rovio’s chief marketing officer, Peter Vesterbacka, says the company probably is worth more than $1 billion, according to a report from Bloomberg, and it looks like the company might be prepping for an IPO.

Rovio makes intensely addictive games that have seen over more than million downloads. It also has been aggressive in finding new sources of growth, such as by moving onto other platforms like Google’s (NASDAQ:GOOG) Android and G+, as well as Barnes & Noble’s (NASDAQ:BKS) Nook.

But the big vision for Rovio is to create a mega-brand. The company actually sees itself as becoming the next-generation Disney (NYSE:DIS). And it’s on its way, at least in one humorous regard — China is home to a “fake” Angry Birds theme park.

To build its brand — and monetize things — Rovio has built a strong merchandising business, selling things like toys and other knickknacks. Sales come to about 1 million items per month, and an Angry Birds movie is in the works.

In light of all this, it should be no surprise that Rovio is prepping for an IPO. And the company should have little difficulty finding eager investors.

So when might a deal hit the market? Unfortunately, according to Vesterbacka, investors probably will need to wait about a year. It looks like Rovio still needs to make the necessary investments and infrastructure changes to become a public company.

And the wait definitely presents some risks. One is the onslaught of fierce competition. Besides traditional operators like Electronic Arts (NASDAQ:ERTS) and Activision Blizzard (NASDAQ:ATVI), Rovio will face a growing number of early-stage companies.

Also, can Rovio make a sustainable business from just one brand? After all, Zynga has been smart to create a wide offering of games, like FarmVille and Mafia Wars, which helps grow its brand and mitigate the risk of a game dropping off in popularity.

Rovio has shown that it can build at least one great brand as well as find creative ways to capitalize on it. But if it wants to have a successful IPO, the company should probably work on expanding past Angry Birds as soon as possible.

Tom Taulli is the author of “All About Short Selling” and “All About Commodities.” You can also find him at Twitter account @ttaulli. He does not own a position in any of the stocks named here.

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