Sega plans to acquire Rovio, the Finnish company behind the Angry Birds games, for three-quarters of a billion dollars, the company announced Monday morning. The Wall Street Journal on Friday reported the deal as nearing completion, although it forecast a higher price of $1 billion.
Sega made it clear that it wanted to strengthen its position in the mobile games market and leverage Rovio’s expertise to bring Sega’s own intellectual property – which of course includes Sonic the Hedgehog – to mobile devices at scale.
The deal, which has been approved by Rovio’s board and shareholders, will see Angry Birds studio priced at $706 million ($775 million). Sega expects to close the acquisition by the end of September 2023. Rovio will be part of Sega Europe, the UK-based subsidiary that also includes studios such as Creative Assembly (Total War) and Sports Interactive (Football Manager).
In a press release, Sega said it expects mobile gaming to grow to 56% of the total gaming market by 2026 and that it intends to “leverage Rovio’s deep expertise in live-service mobile gaming operations to leverage Sega’s current and… bringing new titles to the global mobile gaming market, where there is great potential and many users can be reached.”
In return, Sega says it will help Rovio expand outside of mobile gaming and launch its games on other platforms. It also noted that both companies were quite successful in the multimedia space, bringing Angry Birds and Sonic the Hedgehog to theaters.
Rovio’s original 2009 Angry Birds was one of the earliest smash hit games on smartphones and became the basis of a sprawling franchise of casual physics-based puzzlers. But Rovio is struggling to break out of the Angry Birds business. Earlier this year, the studio courted dispute when the original paid game on Android was delisted and renamed to Red’s first flight on iOS because it dominated the App Store search results. Depending on who you believe, the one-time purchase price of $0.99 either lured players away from later, more lucrative free-to-play versions of the game or (as a Rovio told Axios) which prevents them from downloading Angry Birds games at all.
Sega’s move shows that the takeover wave that has swept the video game industry in recent years is still ongoing, even if it has slowed. Cheap capital and rapid growth during the pandemic have fueled huge deals, like Sony’s $3.6 billion acquisition of Bungie and Microsoft’s still-ongoing $68.7 billion acquisition of Activision Blizzard.
