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Tuesday, February 20, 2024

Sega splurges $776 million on Angry Bird creators Rovio

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Rovio Entertainment, the Finnish-founded studio behind the Angry Birds games, has agreed to its purchase by Japanese gaming giant Sega. Sega Sammy Holdings will pay $776 million (€706m / £625m) for the acquisition, which includes all eight of Rovio’s global studios, and it’s buying the company to “strengthen its position” in mobile gaming, which has always been Rovio’s main focus.

Rovio is known as the Angry Birds studio because, well, it hasn’t had another hit on the same scale. Later titles like The Croods, Nibblers and Retry enjoyed moderate success in some cases, but nothing like the grumpy avians. Angry Birds was released in 2009, as a paid app, and over the first six months of release became a word-of-mouth viral smash, eventually hitting the #1 spot on the App Store. By mid-2012 it had been downloaded over a billion times (Rovio claims it was the first game to reach such a milestone).

Rovio has released dozens of Angry Birds games, including direct sequels and the likes of Angry Birds Star Wars, as well as two Angry Birds movies. It went public in 2017 with a valuation of around $1 billion, and the lower price paid by Sega arguably reflects this inability to deliver another standalone success (even if Angry Birds on its own remains hugely popular and profitable). Sega nevertheless reckons the mobile market will be worth $263.3bn by 2026, and represent 56% of the total games industry.

“Among the rapidly growing global gaming market, the mobile gaming market has especially high potential, and it has been SEGA’s long-term goal to accelerate its expansion in this field,” said Sega Sammy Group CEO Haruki Satomi. “I feel blessed to be able to announce such a transaction with Rovio, a company that owns ‘Angry Birds’, which is loved across the world, and home to many skilled employees that support the company’s industry leading mobile game development and operating capabilities.”

“I grew up playing Sonic the Hedgehog, captivated by its state-of-the-art design,” added CEO of Rovio Alexandre Pelletier-Normand. “Later, when I played Angry Birds for the first time, I knew that gaming had evolved into a true mainstream phenomenon, with the power to shape modern culture.

“Joining Rovio has been an honour and I am proud to have seen Angry Birds continue to grow, as we released new games, series and films. Less known but equally impressive is our industry-leading proprietary technology platform, Beacon, holding 20 years of expertise, allowing tight-knit teams to develop world-class GaaS products.”

Pelletier-Normand ends by comparing Red, the main character in Angry Birds, and Sonic the Hedgehog as “two globally recognized and iconic characters made by two remarkably complementary companies, with a worldwide reach.” Not sure I’d necessarily agree, but doubtless we’ll be catapulting Sonic into Robotnik devices on our phones before long.

Rovio’s board has approved the deal, which is for the entire company and values it at EUR 9.25 per share and EUR 1.48 per option, and the friendly takeover is expected to close by the end of this year.

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