Rovio Entertainment, maker of the Angry Birds mobile games, will cut as much as 16 per cent of staff in its first major firings after failing to replicate the success of the title that made it famous.

The closely held company will eliminate as many as 130 jobs in its home country Finland, Chief Executive Officer Mikael Hed said on Thursday in a blog posting. Rovio, based in Espoo near the capital Helsinki, has about 800 workers worldwide.

Rovio developed one of the biggest early success stories in mobile gaming, only to fall behind rival titles such as Clash of Clans and Candy Crush Saga. Profit has dropped and sales growth slowed as Rovio boosted hiring and newer games such as Amazing Alex and Plunder Pirates fell short of Angry Birds' success.

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"We have been building our team on assumptions of faster growth than have materialised," Hed said in his post.

Angry Birds became the best-earning app in Apple's US store in 2010 and the game's various versions have amassed more than 2 billion downloads. Rovio's revenue, which doubled in 2012, has slowed since as new titles failed to reach top of the charts and Rovio made earlier versions of Angry Birds available for free.

Zynga's fate

By expanding beyond Angry Birds, Rovio has sought to avoid the fate of Zynga, which relied on FarmVille for much of its revenue. Zynga shares have slid 73 per cent since its 2011 initial public offering amid falling sales.

Rovio has also added in-game purchasing, seeking to emulate the success of Clash of Clans and Candy Crush. Those two are free-to-play games that encourage users to keep spending small sums to speed up their game progress, as opposed to a one-time payment to buy most iterations of Angry Birds. Clash of Clans and Candy Crush hold the two top-grossing app spots in the United States.

Sales at Rovio increased 2.5 per cent last year to 156 million euros ($197 million). Supercell, the maker of Clash of Clans, had 672 million euros in revenue and King Digital Entertainment, the maker of Candy Crush, had sales of about 1.4 billion euros.

Profit at Rovio fell 52 per cent to 26.9 million euros in 2013 as it hired about 300 new people. Helsinki-based Supercell's owners sold a 51 per cent stake to Japan's SoftBank a year ago for $1.53 billion. King, which gets its revenue largely from a single game, raised $500 million in an IPO in March. Its stock has lost 43 per cent since.

Toys, cartoons

Rovio's job cuts are a blow to the Finnish government that's highlighted the game industry as a future source of growth for an economy rattled by the slump of Nokia's mobile-phone business and its paper industry. Rovio said in 2012 it was working toward an IPO.

Rovio took the first steps to diversify its business in 2010, licensing its brand for plush toys, activity parks and cartoons. It's making an animated feature film due for release July 1, 2016, and has produced books and learning products. Going forward, the organisation will be focused around games, media and consumer products, Rovio said without giving details. CEO Hed and spokeswoman Sara Antila didn't return calls seeking comment.

Rovio's Chief Commercial Officer Pekka Rantala will assume the company's leadership at the end of the year, with Hed stepping down to join the board of directors, the company said in August.

- Bloomberg