Business & Finance - Wednesday 20.3.2002

Game Over for RIOT-E, after two years and EUR 20 million

 Helsinki-based company was pioneer in entertainment solutions for mobile devices

Riot Entertainment (RIOT-E) was a Helsinki-based creator, publisher and distributor of wireless entertainment content for use on mobile devices. Basically the company made games and other leisure services for your Nokia or Ericsson or Motorola.
The use of the past tense is appropriate here, for on Tuesday RIOT-E announced it was putting up the shutters and filing for bankruptcy. In a short statement on the companyís website, it was noted that negotiations on the third round of financing for the company had fallen through, and that the Board of Directors had decided to declare the company bankrupt, in spite of its rapidly growing turnover and customer base.

RIOT-E thus becomes the latest casualty
in a long line of wireless communications spin-off companies which emerged in 1999-2000, glowed incandescent for a spell on the fuel of great ideas, storytelling, and venture capital input, and then burned out as the much-vaunted wireless revolution did not materialise on time. Technical solutions like 3G and UMTS all took longer to arrive, operators faced spiralling costs, and consumers proved less willing to use other services than voice and SMS-messaging.
By any standards, RIOT-E had a spectacular run, gaining publicity galore through its Lord of the Rings and Spiderman games to be played on the display units of mobile handsets, and through its connection with another popular social phenomenon of the last two years, the Bridget Jones books and movie. SMS, WAP, and other emerging technologies were the tools of choice.

In the space of just 25 months
, RIOT-E went through EUR 21.5 million in venture capital, in addition to a bridging loan made recently in order to stave off impending bankruptcy.
The financiers throughout have been Nokia Ventures and Softbank UK Ventures, with the latter being connected to the giant Japanese bank Softbank and the media concern News Corporation, owned by Rupert Murdoch. At the second round of financing, these were joined by the American Carlyle Group and a number of smaller investors.

The companyís targets of profitability
by the end of 2001 did not materialise, arguably because of the slowdown in the industry as a whole as technological solutions dragged their heels. This is not to say that RIOT-E did not have products or turnover. Several mobile operators used the games and leisure services it made, including Finlandís own Radiolinja.
The company employed 49 persons in its final days, but on the way up it opened offices in London, Berlin, Paris, Rome, Singapore, and Los Angeles, and had a staff of nearly 100.
The parties arranged at its impressive Helsinki headquarters achieved an almost legendary reputation during the heady days when mobile telecoms were seen as the next wave and Finland was recognised internationally as the place to find the best surf.

Previously in HS International Edition:
 After the Gold Rush - the mobile souffle subsides (3.7.2001)

 The brief announcement made by RIOT-E on Tuesday
 RIOT-E Wireless Entertainment

Helsingin Sanomat

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