Angry Birds: Sega agrees to buy video game maker Rovio

Video game maker Angry Birds has agreed to be bought by the Japanese game giant behind Sonic the Hedgehog.

Japan’s Sega Sammy Holdings is paying €706m (£625m) to Finland-based Rovio Entertainment.

Rovio said Angry Birds was the first mobile game to be downloaded 1 billion times, and the brand has also produced two Angry Birds movies.

Sega is looking to leverage Rovio’s mobile gaming expertise.

Last year, Rovio — which has about 550 employees across its eight game studios around the world — said downloads across its family of games had reached five billion.

Announcing the deal, Sega said its decision to buy Rovio was motivated by the need to “bolster its position” in the global gaming market.

She said that this market is expected to grow to $263.3 billion by 2026, with the proportion of mobile games expected to increase to 56%.

Sega said it will use Rovio’s “distinctive expertise in running live mobile games” to help bring its existing and new titles to the global mobile game market.

It highlighted Rovio’s mobile gaming platform, Beacon, which it said has “20 years of high-level experience running live mobile games” in the US and Europe.

“Among the rapidly growing global game market, the mobile game market has a particularly high potential, and Sega’s long-term goal has been to accelerate its expansion in this field,” said Haruki Satomi, CEO of Sega Sammy Holdings.

“I feel excited to be able to announce such a deal with Rovio, the company that owns ‘Angry Birds’ beloved around the world, and home to many skilled employees who support the company’s leading mobile game development and play capabilities,” he added.

Berenberg analyst Edward James said Rovio was an “attractive asset” because it has “one of the best and strongest brands in mobile gaming” in Angry Birds.

He added that the Beacon mobile gaming platform was “very useful” for Sega.

“Given the scale of the Angry Birds franchise and the long-running nature of the titles, the depth of data and knowledge of the Beacon platform is an exceptional value and almost impossible for Sega to build from scratch, at least in a reasonable time frame.”

Rovio’s revenue increased to 317.7 million euros in 2022 from 272.3 million euros in 2020, but during the same period its operating profit decreased from 42.5 million euros to 28.6 million euros.

Rovio’s share valuation was $707m (£571m) at close of trading on Friday, but shares in the company jumped nearly 18 per cent on Monday after the deal with Sega.

Sega Sammy is a Japanese global holding company formed by the merger of video game giant Sega and Sammy Corporation in 2004.

Sega has produced several multi-million-selling video game franchises and is known worldwide for its character Sonic the Hedgehog, who has also appeared in two films.

Sami develops and sells amusement arcade machines.