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Japanese gaming giant, Sega Sammy Holdings, is in a pole position to acquire Rovio, the creator of the Angry Birds franchise. According to The Wall Street Journal, the deal is worth a whopping $1 billion. Commentators familiar with the deal said it could be finalized early next week.

Rovio street

Rovio, the Finnish mobile game maker, is best known for Angry Birds, the physics puzzle game that first launched on iOS in 2009. Following the success of the game, Rovio delivered multiple sequels, spinoffs, and tie-ins with other franchises like Transformers, Star Wars, and the animated movie Rio.

Sega and Rovio have previously collaborated to bring Sonic the Hedgehog characters to Angry Birds Epic in 2015. Although Angry Birds has been a huge success, that success has not trickled down to the Finnish company’s other games including Darkfire Heroes (an action role-playing game), Sugar Blast, and Small Town Murders.

Sega has an impressive roster of upcoming mobile games including a variety of Sonic the Hedgehog running games and epics from the Sega Genesis era. If the deal scales through it will be another billion-dollar mobile game studio acquisition this decade.

Back in 2021, Electronic Arts made two billion-dollar acquisitions including Glu Mobile for $2.1 billion and Playdemic for $1.4 billion. A year later, Take-Two Interactive acquired Zynga for a mouthwatering $12.7 billion. Microsoft is on the verge of acquiring King, the makers of Candy Crush later this year.

The motive behind the Rovio acquisition is unclear

Rovio office

Many analysts have expressed shock over the proposed acquisition by Sega for several reasons. Firstly, Rovio has experienced a decline in popularity in recent years. The company has lost its fans to competitors like Candy Crush. Rovio has reported falling profit in recent years which has led to layoffs.

In 2016, Rovio successfully pulled through with a movie adaptation called The Angry Birds Movie. Although it was a success, It is still the seventh highest-grossing video game movie adaptation. The Angry Birds Movie 2 did not enjoy the same level of success.

Earlier in February the Finnish company announced that it was shutting down the Angry Birds Classics on Android and rebranding the iOS version. According to the company, Angry Birds Classics was making it difficult for fans to discover their other game portfolio.

Rovio ended talks with Playtika in March

Sega is not the first company that has made attempts to acquire the Finnish company. Earlier in January, Israeli developer, Playtika, approached Rovio for a similar acquisition. However, the talk ended in futility with Rovio opening talks with other potential buyers. Although Playtika raised the offer to $736 million, it was still not enough for the Finnish company to give away its ownership.

“Rovio continues its strategic review, including preliminary non-binding discussions with certain other parties, in order to reach the best possible outcome for Rovio and its shareholders,” the Finnish company said after the breakdown of talks with Playtika.

At that time, a number of other interested parties were listed including Disney, Netflix, Sony, Take-Two, and EA. Sega was not one of the frontrunners expected to close the deal. Perhaps, that explains the shock trailing the announcement that the Japanese company was close to acquiring Rovio.

Angry Birds enjoyed a sweet run

Red Angry bird

Rovio’s Angry Birds game was the first mobile game to hit 1 billion downloads. The milestone was certified by Guinness World Records. The company also claims that its cumulative game portfolio has exceeded 5 billion downloads.

Perhaps it is this cumulative download count that convinced Sega to pay the price of 20 cents per download. Maybe, Sega wants to permanently create an alliance between Sonic and Angry Birds. Our fingers are crossed as we await the game franchise that will sprout from this acquisition.

Do you think that Sega’s acquisition of Rovio was a smart investment? Let us know your thoughts in the comment box below.

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