Sega Agrees To Buy ‘Angry Birds’ Developer Rovio Entertainment For $706M

Video game developer Sega Sammy Holdings has announced its intentions to purchase Angry Birds creator and rightsholder Rovio Entertainment for €706 million ($776 million).

What is Rovio? Rovio is a game development company that has built a global franchise out of its immensely successful mobile game Angry Birds. There have been multiple animated series and two features. The developer is headquartered in Espoo, Finland.

What are the terms of the deal? As announced by Sega on Monday, April 17, the company will buy Rovio for €706 million ($776 million) after receiving approval from Rovio’s board of directors. The deal should close sometime between July and September, pending regulatory approval.

Context: As we discussed back in February, the video game industry is going through a period of consolidation as demonstrated by record-breaking mergers and acquisitions. According to the video game agency Digital Development Management, 2022 was the second-highest year ever for video gaming investments, mergers, and acquisitions activity at $51.5 billion. This year could be even bigger if Microsoft is allowed to finalize its acquisition of gaming giant Activision Blizzard for $68.7 billion. With that deal, 2023 would shatter the previous record of $74.5 billion set in 2021. The Rovio acquisition may look like bird feed compared to the Microsoft/Activision deal, but it’s certainly significant for the parties involved and further demonstrates a larger trend.

Why is Sega buying Rovio? For one, purchasing the Finnish company will add one of the biggest mobile gaming titles of all time to the company’s catalog. Perhaps more importantly though, Sega says its goal is to take in Rovio’s live-operated mobile game development capabilities and expertise in mobile game operation as a means of accelerating the development of mobile-compatible and multi-platform versions of existing Sega IPs. Interestingly, the news comes shortly after Nintendo’s Shigeru Miyamoto said that his company is moving away from mobile games with its biggest franchise, The Super Mario Bros.

So why does Sega want to get more involved with mobile gaming? Sega is hardly alone in its desire to better take advantage of the mobile gaming landscape. According to Microsoft, the Activision Blizzard deal is more about getting its hands on Candy Crush developer King than it is about scoring Call of Duty or Overwatch. Mobile gaming was also the key motivating factor in Savvy acquiring mobile game giant Scopely for $4.9 billion and Take Two’s purchase of Farmville dev Zynga for $12.7 billion.

What they’re saying: Sega Sammy president and group CEO Haruki Satomi said:

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. I feel blessed to be able to announce such a transaction with Rovio, a company that owns Angry Birds, which is loved across the world, and home to many skilled employees that support the company’s industry-leading mobile game development and operating capabilities. Historically, as represented by the Sonic the Hedgehog series, Sega has released countless video game titles to various gaming platforms. I am confident that, through [the] combination of both companies’ brands, characters, fanbase, as well as corporate culture and functionality, there will be significant synergies created going forward.

Rovio CEO Alexandre Pelletier-Normand added:

Joining Rovio has been an honor and I am proud to have seen Angry Birds continue to grow, as we released new games, series, and films. Less known but equally impressive is our industry-leading proprietary technology platform, Beacon, holding 20 years of expertise, allowing tight-knit teams to develop world-class GaaS products. Our mission is to “Craft Joy” and we are 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.