Japanese gaming publisher Sega announced on Monday it will buy the company behind smartphone one-hit wonder Angry Birds for $775 million. It’s the latest major gaming acquisition, and one of the weirdest ones yet.
We got an initial tease of the deal in a report by The Wall Street Journal on April 15 that suggested Sega might purchase Rovio for as much as $1 billion. Discussions over the weekend apparently knocked that number down a couple hundred million, and now the two companies have announced an official agreement, calling it a “friendly takeover.”
Sega argues the deal will help it bring its existing franchises to mobile and help Rovio bring its games to other platforms. Both companies have also already experimented with transmedia spin-offs, most notably in Hollywood where Sonic and Angry Birds both led to profitable film adaptations. “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,” Haruki Satomi, President and Group CEO of Sega’s parent company, said in a press release.
The deal follows a string of major acquisition announcements as the video game industry consolidates, and specifically ones aimed at helping companies get a bigger part of the massive mobile gaming market. Microsoft is buying Activision Blizzard ($69 billion) which makes Call of Duty Mobile and Candy Crush. Take-Two bought Zynga ($12.7 billion), which makes Poker and Words with Friends. And the Saudi Arabia-backed Savvy Entertainment Group recently announced it’s buying Scopely ($4.9 billion), the company behind WWE Champions and Star Trek Fleet Command.
Mobile gaming never ended up replacing PC and console gaming, but it’s still huge. Apple’s game revenue from the App Store in 2021 alone was estimated to be over $15 billion. And despite being one of the oldest mobile gaming hits at this point, Angry Birds sequels and spin-offs continue to make money.
At the same time, Sega isn’t nearly as big as some of these other players (its entire market cap is less than the Scopely deal) and making hit mobile games is way harder than just grafting familiar faces onto clones of whatever’s topping the charts. Electronic Arts recently canned both its Battlefield and Apex Legends mobile spin-offs and laid off a bunch of people after a less-than-stellar year for its smartphone game business. And while Angry Birds is far from a dead game, it’s clear Rovio has struggled to capture lightning in a bottle a second time.
Coincidentally, 2023 marks the tenth anniversary of Sega buying JRPG powerhouse Atlus for just $140 million. That’s about half what Embracer recently paid to snatch up the Deus Ex and Tomb Raider studios from Square Enix. We’ll see who ends up buying who next. In the meantime I can’t wait to see what unhinged ways Sega finds to incorporate Angry Birds into the next Sonic game.