Sega has announced it intends to buy Angry Birds mobile games developer Rovio for $775 Million by September 2023.
In the hay-days of Angry Birds’ popularity, Rovio was worth over $3 Billion, but never quite knew how to keep the brand in the spotlight. So a few Angry Birds movie tie-ins, microtransaction-plagued Angry Birds Kart, and years of the same old games later, you could find cheap Angry Birds plushies* in dollar stores since. The last (failed) attempt at reviving the Angry Birds franchise in 2022 was done by rebuilding the original from the ground up. Still, “Rovio Classics: Angry Birds” was a faithful re-make of the original Angry Birds game that took the world by storm that gave fans what they long-desired. It’ll be interesting to see if Sega developers can breath fresh air into the truly classic Angry Birds franchise. Its lighthearted humor deserves a place in our daily gaming lives.
Here’s the full take-over bid press release:
SEGA Corporation (the “Company”), a subsidiary of SEGA SAMMY HOLDINGS, at the meeting of its Board of Directors held on April 17, 2023, resolved to implement a tender offer (tender offer under the Finnish Law, the “Tender Offer”) to acquire Rovio Entertainment Oyj (“Rovio”), a mobile game company headquartered in Finland, through SEGA’s wholly-owned UK subsidiary SEGA Europe Limited (the “Acquisition”) and SEGA SAMMY HOLDINGS has entered into a definitive agreement with Rovio pursuant to which the Tender Offer is made.
Through the Tender Offer, SEGA aims to acquire the entirety of Rovio’s outstanding shares and options at EUR 9.25 per share and EUR 1.48 per option, or EUR 706 million in total (approximately ¥103,680 million converted at EUR1 = ¥146.9 (FX rate as of April 14, 2023). The same FX rate is applied hereinafter). The Acquisition is a friendly takeover, as Rovio’s board of directors has agreed to, and has expressed support towards the Tender Offer. Shareholders in Rovio who in aggregate hold shares corresponding to approximately 49.1 percent of the outstanding shares and votes in Rovio, have irrevocably undertaken to accept the Offer, subject to certain customary conditions. The Acquisition is expected to close in the second quarter of FY2024/3 and is contingent on the completion of reviews under applicable antitrust laws and other customary conditions.
- 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 - (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 5 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 honour 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.
*I bought them, I bought them all! ^_^ Some are in my gaming room, others my son plays with. I loved these Angry Birds games for years and I’m glad to see Sega sees a lot of future potential in them.
Are you looking forward to Angry Hedgehogs? 😉