Forget Microsoft and Activision – Sega is buying Angry Birds for £625,000,000

As part of its efforts to expand into mobile gaming, Sega has agreed to purchase Angry Birds studio Rovio Entertainment.

It’s easy to forget but Microsoft isn’t the only company sucking up third party games studios at the moment. Right now, almost all the big names are looking to add new studios to their portfolios, including Sony and Embracer Group.

Today, it’s Sega’s turn, which has announced that it is purchasing Rovio Entertainment, a Finnish studio most famous for creating the Angry Birds franchise.

These deals obviously don’t happen overnight, but the news definitely feels like it’s come out of nowhere, with Sega spending €706 million (roughly £625 million) to acquire Rovio in its entirety.

Described as a ‘friendly takeover,’ Rovio and its shareholders have all agreed to the deal so you can expect it to go through with little hassle, especially since it’s not going to face the same level of scrutiny as Microsoft’s Activision buyout.

The acquisition is expected to close in the second quarter of the 2024 fiscal year, so by the end of this September at the very latest.

As for the motive behind the deal, Sega hopes to leverage Rovio’s experience with mobile game development and multimedia expansion to assist its own efforts.

Aside from the Angry Birds mobile games, Rovio has adapted them into multiple TV shows and two animated movies. Sega has recently begun pursuing similar ventures with Sonic The Hedgehog, resulting in two well received live action movies and a Netflix cartoon.

Sega will also support Rovio in its own efforts to ‘expand its platform outside of mobile gaming.’

While Rovio obviously frames the acquisition as a positive, with CEO Alexandre Pelletier-Normand saying the company is ‘thrilled at the idea of using our expertise and tools to bring even more joy to our players, enhancing and expanding Rovio’s and Sega’s vibrant IPs,’ it does highlight that Rovio has suffered a major fall from grace over the last decade.

Although the Angry Birds franchise remains profitable, it’s certainly past its peak in terms of popularity. Also, while the original game remains a classic its various sequels have usually been riddled with in-your-face microtransactions and/or weren’t very good.

Perhaps the best indicator for this is how much Sega is having to pay to buy it. When Rovio became a publicly listed company in 2017 it was valued at around $1 billion (via VentureBeat) – nowhere near as much as what it’s being sold for.

In fact, according to IGN, Rovio was also in negotiations with an Israeli mobile company called Playtika, which was offering to buy it out for $800 million. That’s approximately £644 million, more than Sega’s offer.

It’s too soon to tell how this will affect either company in the long run, although Angry Birds is at little risk of joining NiGHTS and Altered Beast in the forgotten Sega IPs club.

Sega wants to expand its growth within the mobile sector, and having a popular franchise like Angry Birds will only benefit that. Although it could task Rovio with creating mobile games based on its own IPs, including older ones that Sega is supposedly interested in reviving.

Regardless, acquiring Rovio is expected to be a boon for Sega, at least according to one Stuart Smith, a corporate and commercial lawyer at London law firm Simkins.

‘This deal would give Sega a stronger foothold in the increasingly lucrative mobile sector, something that even a platform holder like Nintendo has been trying to access in recent years,’ says Smith.

He adds, ‘With the huge success of the new Super Mario movie, I suspect that Rovio’s experience in adapting Angry Birds for the cinema will also have caught Sega’s eye.’

Despite Smith’s comments Nintendo has made it clear that it’s moving away from mobile games, which it’s always been obvious it doesn’t really like being involved with. And now it’s got all its Hollywood money it won’t have to make new app games if it doesn’t want to.

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