Sega has officially announced its decision to acquire Angry Birds developer Rovio. The Japanese company wants to strengthen its position in the global mobile games market with the help of the Finnish developer.
What happened?
- On April 17, Sega Sammy Holdings officially made an offer to acquire Rovio Entertainment for €706 million ($776 million) after the meeting of its board of directors.
- The Japanese company will pay €9.25 for every share and €1.48 for every option held by the Angry Birds maker. As reported by Bloomberg, Rovio shares rose 19% on Monday.
- Rovio’s board of directors has already agreed to the proposal. The deal, which is subject to antitrust reviews, is expected to close in the second quarter of FY2024 ending September 30, 2023.
- Over the weekend, the Wall Street Journal reported that Sega plans to acquire Rovio for roughly $1 billion.
- In January, Israeli mobile publisher Playtika also offered to acquire Rovio, which sent the Finnish company’s stock skyrocketing following the buyout talks. However, the two companies couldn’t agree on the terms.
Why is Sega acquiring Rovio?
- Sega wants to accelerate its growth in the global games market with the help of Rovio’s live-service mobile game development capabilities and its world-renowed IP.
- The Japanese publisher plans to bring more of its current and new franchises to mobile. So one of the core parts of the $776 million deal is Beacon, Rovio’s platform that provides developers with a toolset to create and operate GaaS titles.
- The Angry Birds franchise, which has generated over $1 billion on mobile, spans not only video games, but also films, toys, and other products.
- On its side, Sega will also help Rovio bring its games to other platforms outside of mobile.
- “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,” Sega CEO Haruki Satomi said. “I am confident that, through combination of both companies’ brands, characters, fanbase, as well as corporate culture and functionality, there will be significant synergies created going forward.”
Sega’s position in the mobile games market
- Sega currently operates dozens of mobile games with over 1 billion downloads and a total revenue of around $1.78 billion, according to AppMagic.
- The company’s portfolio includes titles based on the Sonic, Total War, Crazy Taxi, and Football Manager franchises. The only issue is that its highest-grossing games are only popular in Japan.
- Sega’s top 3 mobile games by revenue are Project Sekai: Colorful Stage! feat. Hatsune Miku ($396 million), Puyo Puyo!!Touch ($251 million), and Chain Chronicle ($152 million). And Japan accounts for 95-100% of their lifetime IAP revenue.
- So with the Rovio acquisition, Sega plans to strengthen its position in the mobile games market and reach the global audience.