The Future of Angry Birds & What it Means

Rovio, the company behind the wildly popular app Angry Birds, has plans to launch a live, multi-player and multi-media version of its mobile game. That new, richer version of the game could be offered at no cost to the data plans of users, through carrier partnerships. If successful, this plan for what to do with the huge Angry Birds market footprint (now with more than 100 million downloads), could cause substantial technical and economic disruptions across the mobile world. Rovio hopes it will, as do a number of other industry players.

We put clues together at South by Southwest this week, based on conversations with several Rovio team members and other industry leaders, and sketched out what I believe is the company’s plan. Rovio team members have now confirmed that the following theory is accurate.

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Announcements Stacked Up High

Rovio was at the South by Southwest festival in Austin, Texas this week to make a number of announcements. First, the company told the world that it has raised more than $42 million in venture funding, including from early Facebook backers Accel Partners. Then the company announced that it just passed 100 million downloads of Angry Birds, a number it estimates means that one third of all smart phone owners have Angry Birds on their devices.

The company also talked about its new Mighty Eagle software developement kit (SDK), which will allow 3rd party games to integrate the level-busting Mighty Eagle character Angry Birds sells into their games, in exchange for cross promotion by Rovio.

Angry Birds, With Live Video

Peter Vesterbacka, whose title at Rovio is simply “Mighty Eagle,” told me the company is also working on an arrangement with mobile carriers to offer a data-free version of Angry Birds. I thought that was interesting but didn’t think much of it, until I told my wife about it and she said “so what, how much data does it take to play Angry Birds?”

It was a great question, and one I sought to find an answer for by speaking to a number of other people at the event, some of whom I’ve shared thoughts from here. The best theory: that the company is developing a version of the game for which a data-free plan will be meaningful for players. Multi-player live challenges, with multi-media, something heavy duty that players would sit on all day and rock the mobile phone networks with.

What would be so disruptive about a live Angry Birds? It will be data-free Angry Birds, similar to Facebook’s Facebook Zero deal with mobile carriers around the world.

Facebook Zero is super light-weight, though. Is there really anything Angry Birds could add to its app that would make a meaningful impact on a data consumer’s costs? Vesterbacka said he has no doubt there is. He also points out that outside the United States, data caps are lower and sometimes data consumption is purely metered.

What kinds of features could be added that would bump up the data load of Angry Birds? Vesterbacka said he had no problem thinking of a lot. Theoretically, for example, the app could offer video play-back sharing of great shots. It could include Facetime-like video chat inside the multi-player challenges. The 80 million views of video trailers and previews on the Rovio YouTube channel could be served up from the app itself, instead of from YouTube. Those were just 3 quick examples, Vesterbacka said he could think of more, all day long. He’s a refreshingly straight-forward person to talk to, and he’s not alone in that on the team.

What’s In It for the Phone Companies

Why will mobile carriers be willing to eat those bandwidth costs and offer an app like that for free? Rovio hopes they will do so in exchange for a cut of revenues from the carrier level e-commerce platform it has built called the Bad Piggy Bank. When the Bad Piggy Bank was announced earlier this year, we called it a big sign of things to come in terms of network level features including but not limited to e-commerce. Network level functionality like this could be a big new area of innovation in the future.

Rovio hopes that the Bad Piggy Bank will be deployed by app developers and carriers around the world who are concerned about the concentration of power in Apple’s iTunes. Rovio also hopes it will be able to use its big market share to push carriers towards making their networks more favorable for software developers.

Vesterbacka said he hopes to make Angry Birds the most carrier-friendly mass app on the market as well, by making design and development decisions informed by the efficiency interests of the network. Limiting the number of times a messaging connection is open and closed per user session, for example, is something the networks really appreciate – but it’s also a big battery saver for the user.

What’s In It For App Developers

Some app developers believe, though, that Rovio’s biggest impact will be in pushing the network providers towards conditions more favorable for app developers.

Rudy De Waele, co-founder of international mobile app showcase AppCircus, has this to say about Rovio.

“Those guys are going to challenge the whole ecosystem. They think big, they think ahead and they can pull off breakthroughs on multiple levels.

“Mobile opperators are desperately trying to reach developers, they know they have to change, but at the big ones, their DNA isn’t ready to talk to individual developers. Peter [Vesterbacka] knows the carriers and that opens a lot of doors, because they’ve been doing things under the old model of apps and big carriers for years.

“This has never been seen before, you’re a mobile game and you go to Hollywood! It’s going to be a challenge for the carriers to get onboard, but I look forward to the advantage that the first ones capture, especially with young people and gamers, when they start offering these Angry Bird experiences for free and jump on board the rest of this plan.”

What might that look like? De Waele offered the example of Spanish and Latin American network carrier Telephonica. That company recently launched an API that gives app developers a cut of the revenue generated from the data their apps let customers consume. Rovio could do things like agitate for programs like that around the world or push for developers to get a better cut.

Vesterbacka raised the concern that mobile carriers would likely charge customers or developers a premium for the best bandwidth alocation, with those unwilling to pay more getting “best effort” service. Angry Birds could leverage its giant marketshare to make sure their users are exempt from such constraints, for example.

Sam Morton, co-founder of a startup called Screach, the winner of the App Circus mobile startup competition at South by Southwest, said he’s hopeful about the impact Angry Birds could have on the relationship between developers and carriers. “If these guys trailblaze for us, it really opens things up. Then Apple becomes less important.”

The Power and Pitfalls of Cross-Network Platforms

That might be taking things a bit far, but Rovio certainly aims big. Can the Bad Piggy Bank become the cross-network e-commerce platform that the world outside Apple gets behind to challenge Apple’s dominance? Oren Michels of API management company Mashery says the carriers may not want to collaborate using Rovio e-commerce to counter-ballance Apple’s e-commerce power because they are focused on differentiating themselves individually and have never worked well together.

Not everyone agrees. “Rovio is showing that it’s possible to simultaneously shift the revenue model for service providers, support the needs of developers and give consumers a better user experience,” says Laura Merling, Senior Vice President of international network instrumentation service Alcatel-Lucent’s Open API Platform. (Disclosure: Both Mashery and Alcatel-Lucent are ReadWriteWeb sponsors.)

Scaling Up Like Facebook

The ultimate outcome of the company’s efforts are of course unknowable today, but it’s guranteed to be interesting to watch. Leading mobile and network industry analyst Chetan Sharma offered us this take on the viability of Rovio’s plans.

The biggest leverage Angry Birds have is scale. Scale is very hard to build. If they play their cards right, they could become what Facebook is to online social networking. Facebook focused maniacally on building the scale first, because once you have scale – meaning millions of users using your products on a daily basis, you could build a business just selling chewing gum (you get my point). A data-charge free version is right in line with Facebook’s data-free social networking app & access. Good for carriers, good for consumers and good for Rovio.

“Building a successful billing system will be a bit difficult because it directly impacts operator billing revenue strategies. Rovio should continue to leverage and build ‘Angry Bird as a Service’ or Angry Birds as a Platform and they will have multiple opportunities open up for them. They have tremendous respect in the ecosystem and with ever-increasing reach and consumer addiction, their future looks bright.”

The future looks bright indeed for Angry Birds; bright, media-rich, real-time, free and disruptive on a platform level. That’s a very ambitious vision for a pile of pigs and birds. Such could be the foundation of the mobile web’s future.

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