SEGA Sammy Holdings announced it will acquire Finland-based Angry Birds developer Rovio Entertainment for €706 million or roughly $773.8 million. The company’s announcement comes just a few days after a report confirmed SEGA was nearing a deal to acquire Rovio this weekend.
According to SEGA, the acquisition is expected to close in the second quarter of current fiscal year ending in March 2024. The acquisition will be undergo an extensive review process under applicable antitrust laws and other customary conditions. Story of the acquisition first broke through Wall Street Journal on April 15, and SEGA quickly released a statement to confirm a deal was not finalized. However, SEGA would release another statement confirming that the deal would follow through.
The latest details are available below via SEGA:
Background and Purpose of the Acquisition
(1) Positioning of the Consumer business for the Company
The Company positions the Consumer segment of its Entertainment Contents Business as a growth area under its Mid-Term Plan (FY2022/3-FY2024/3), and has accelerated its efforts to strengthen the business through initiatives such as converting existing IPs into global brands, strengthening user engagement through multi-platform support and enhanced media mix, etc.
As a part of its growth strategy to invest up to ¥250 billion during the five-year period ending FY2026/3, the Company has been exploring investment opportunities in the Consumer area to strengthen its development capabilities as well as to create new ecosystems.
In order to strengthen global development capabilities, SEGA has historically acquired numerous development studios, from the UK-based The Creative Assembly Ltd. in 2005, to the Japan-based ATLUS. CO., LTD. (formerly, Index Corporation) in 2013, and the acquired studios have all greatly expanded its scale while also releasing many new titles across the globe.
(2) Background of the Acquisition
The size of the global gaming market is projected to reach US$263.3 billion by 2026, growing at a CAGR of 3.5% from 2022 to 2026. The mobile gaming market in particular, is set to grow at a CAGR of 5.0% to represent 56% of the global gaming market overall, an increase from 53% in 2022. (Source: IDG Report (dated October, 2022)).
The Company firmly believes that it is imperative to continue investing in its game development and operating capabilities, in order to further strengthen its position in this fast-growing mobile and global gaming market, which therefore led to the decision to acquire Rovio.
Through the Acquisition, the Company aims to take-in Rovio’s live-operated mobile game development capabilities and expertise in mobile game operation, to accelerate the development of mobile-compatible and multi-platform-supported version of SEGA’s existing game IPs, thereby strengthening and further accelerating global expansion of SEGA’s game portfolio.
(3) Purpose of the Acquisition
Rovio is a global mobile-first, games company that creates, develops and publishes mobile games, which have been downloaded over five billion times. Rovio is best known for the global Angry Birds brand, which started as a popular mobile game in 2009, and has since evolved from games to various entertainment, anime, and consumer products through brand licensing.
SEGA aims to accelerate its growth in the global gaming market and increase its corporate value by generating synergies between SEGA’s existing businesses and Rovio’s strengths, including its global IPs and live-operated mobile game development capabilities. More specifically, SEGA aims to create synergies with particular focus in the following areas:
- Utilization of Rovio’s distinctive know-how in live service mobile game operation, to bring SEGA’s current and new titles to the global mobile gaming market, where there is large potential, and many users can be accessed.
- SEGA strongly believes Rovio’s platform, Beacon, holds 20 years of high-level expertise in live service-mobile game operation centered around the United States and Europe.
- Rapid expansion of both companies’ fanbase by sharing know-how regarding multi-media expansion of global characters.
- Rovio and SEGA have both succeeded in extending its IPs, Angry Birds and Sonic the Hedgehog, to various media outside of video games, such as movies, anime, and merchandising, and accordingly hold a strong fanbase around the world as well as know-how regarding IP expansion.
- Support cross-platform expansion of Rovio’s IP using SEGA’s capabilities.
- Rovio is aiming to expand its platform outside of mobile gaming, and SEGA will actively look to support this process through its capabilities.
Comments from Haruki Satomi, President and Group CEO, Representative Director of SEGA SAMMY HOLDINGS
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 combination of both companies’ brands, characters, fanbase, as well as corporate culture and functionality, there will be significant synergies created going forward.
Comments from Alexandre Pelletier-Normand, CEO of Rovio
I grew up playing Sonic the Hedgehog, captivated by its state-of-the-art design. Later, when I played Angry Birds for the first time, I knew that gaming had evolved into a true mainstream phenomenon, with the power to shape modern culture.
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.
Red and Sonic the Hedgehog: two globally recognized and iconic characters made by two remarkably complementary companies, with a worldwide reach that spans mobile, PC / console, and beyond. Combining the strengths of Rovio and SEGA presents an incredibly exciting future.
