Sega will 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 had marked the deal as nearly complete on Friday, though it predicted a higher price tag of $1 billion.
Sega made it clear that it wanted to strengthen its position in the mobile games market and use Rovio’s expertise to make Sega’s own intellectual property – which of course includes Sonic the Hedgehog – mobile in a major way.
The deal, which has been approved by Rovio’s board and shareholders, puts a €706 million ($775 million) price tag on the Angry Birds studio. Sega expects to complete the acquisition by the end of September 2023. Rovio will become part of Sega Europe, the British 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 aims to “use Rovio’s distinctive know-how in live-service mobile gaming operations to expand Sega’s current and new titles to the global mobile gaming market, where there is great potential and many users to access.”
In return, Sega says it will help Rovio expand beyond mobile gaming and launch its games on other platforms. It also noted that both companies have been quite successful in the multimedia space, bringing Angry Birds and Sonic the Hedgehog to cinemas.
Rovio’s 2009 original Angry Birds was one of the first big hit games on smartphones and became the basis of a sprawling franchise of casual physics puzzle games. But Rovio struggles to break out of the Angry Birds business. The studio came earlier this year caused controversy when it removed the original paid game on Android and renamed it as Red’s first flight on iOS, as it dominated the app store search results. Depending on who you believe, the $0.99 one-time purchase price lured players away from later, more lucrative free-to-play versions of the game, or (as Rovio told Axios) to discourage them from downloading Angry Birds games.
Sega’s move shows that the wave of acquisitions that has gripped the video game industry in recent years is still ongoing, even if it has slowed down. Cheap capital and rapid growth during the pandemic have led to huge deals such as Sony’s $3.6 billion acquisition of Bungie and the ongoing saga of Microsoft’s $68.7 billion purchase of Activision Blizzard.