Sega confirms it’s buying Angry Birds and pushing into mobile

Sega is set to acquire Rovio, the Finnish company behind the Angry Birds games, for three quarters of a billion dollars, the company announced on Monday morning. The Wall Street Journal had flagged the deal as close to completion on Friday, although it predicted a higher $1 billion price tag.

Sega made it clear that it was looking to strengthen its position in the mobile gaming market, and to use Rovio’s expertise to bring Sega’s own intellectual property — which includes Sonic the Hedgehog, of course — to mobile in a major way.

The deal, which has been approved by Rovio’s board and shareholders, puts a €706 million ($775 million) price tag on the Angry Birds studio. Sega says it expects to be able to complete the acquisition by the end of September 2023. Rovio will become part of Sega Europe, the UK-based subsidiary that also encompasses studios like Creative Assembly (Total War) and Sports Interactive (Football Manager).

In a press release, Sega said it expects mobile gaming to grow to 56% of the overall gaming market by 2026, and that it aims to use “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.”

In return, Sega says it will help Rovio expand outside of mobile gaming and launch its games on other platforms. It also noted that both companies have been quite successful in the multimedia realm, bringing Angry Birds and Sonic the Hedgehog to movie theaters.

Rovio’s original 2009 Angry Birds was one of the earliest smash hit games on smartphones, and became the foundation of a sprawling franchise of casual physics puzzle games. But Rovio has struggled to break out of the Angry Birds business. Earlier this year, the studio courted controversy when it delisted the original paid game on Android, and renamed it as Red’s First Flight on iOS, because it was dominating app store search results. Depending on who you believe, the $0.99 one-off purchase price was either tempting players away from later, more lucrative free-to-play versions of the game, or (as Rovio told Axios) discouraging them from downloading any Angry Birds games at all.

Sega’s move shows that the acquisition spree that has gripped the video game industry for the past few years is still going, even if it has slowed. Cheap capital and rapid growth during the pandemic has led to huge deals such as Sony’s $3.6 billion acquisition of Bungie and the still-ongoing saga of Microsoft’s $68.7 billion purchase of Activision Blizzard.