Angry Birds: Sega Sammy Holdings to Acquire Angry Birds Maker Rovio Entertainment

Sega Sammy Holdings to Acquire Angry Birds Maker Rovio Entertainment

Finnish mobile game developer Rovio Entertainment, the creator of the popular Angry Birds franchise, has agreed to be acquired by Japan’s Sega Sammy Holdings in a deal worth €706m ($850m). Sega Sammy, which is behind the Sonic the Hedgehog character, said the acquisition will help to bolster its position in the global gaming market. It also aims to leverage Rovio’s expertise in live service mobile game operation to expand its presence in the growing mobile gaming market, which is expected to account for 56% of the gaming industry by 2026.

The deal comes as Rovio has struggled to match the success of the original Angry Birds game. Despite achieving one billion downloads and spawning two feature films, the Finnish company has yet to produce a follow-up game that can replicate the success of its flagship title. The company had been seen as a potential takeover target for some time, as the gaming industry has become increasingly consolidated.

Rovio, which employs around 550 people in eight game studios around the world, posted revenues of €317.7m in 2022, up from €272.3m in 2020. However, its operating profits fell from €42.5m to €28.6m over the same period. The company’s stock market valuation was $707m (£571m) at the close of trading on the Friday prior to the announcement.

Sega Sammy was formed by the 2004 merger of video game producer Sega and arcade machine manufacturer Sammy Corporation. The company has a long history of producing successful franchises, including Sonic the Hedgehog, which has also been adapted into two movies.

As part of the acquisition, Sega Sammy will take advantage of Rovio's mobile gaming platform, Beacon, which has over 20 years of experience in live service mobile game operation in the US and Europe. By incorporating Rovio's unique knowledge and capabilities, Sega Sammy plans to bring its current and upcoming titles to the global mobile gaming market.

According to Haruki Satomi, the CEO of Sega Sammy Holdings, the mobile gaming market has high potential and has been a long-term goal for the company. He expressed his enthusiasm for the deal with Rovio, a company that has many skilled employees who support the industry-leading mobile game development and operating capabilities.

The acquisition of Rovio Entertainment is expected to help Sega Sammy strengthen its position in the gaming industry, which is projected to reach $263.3bn by 2026. The deal marks the latest in a series of consolidations in the gaming industry, as companies seek to expand their market share by acquiring or partnering with other firms.

In conclusion, the acquisition of Rovio Entertainment by Sega Sammy Holdings marks a significant move in the global gaming market. The deal is expected to help Sega Sammy expand its presence in the fast-growing mobile gaming market, and leverage Rovio's expertise in live service mobile game operation. As the gaming industry continues to evolve and consolidate, it will be interesting to see what other mergers and acquisitions will take place in the years ahead.