Sega in Talks to Acquire Rovio for $1 Billion
The Wall Street Journal reported that Sega is in advanced negotiations to acquire Rovio Entertainment Corp., the Finnish game maker behind the popular mobile game Angry Birds, for a price close to $1 billion. The acquisition could be announced as early as next week if talks don't fall apart over the weekend.
Angry Birds was launched in 2009 and quickly became a sensation, becoming the first mobile game to draw over one billion downloads. Players use a slingshot to launch birds at pigs protected by materials such as wood, glass, and stone. The game's simplicity and addictive nature kept users hooked, and Rovio capitalized on its success by releasing 21 more Angry Birds games.
Rovio has been unable to replicate the success of Angry Birds with a new franchise. Still, last month, the company ended negotiations with Playtika Holding Corp., valued at more than $800 million, to seek other suitors. Sega's offer reportedly values Rovio at a price 25% higher than that of Playtika.
While some might question whether Rovio is still worth $1 billion, considering the company's inability to launch another successful franchise, Sega may have a plan to leverage the Angry Birds name. Rovio reported last year that all of its games combined had a total of five billion downloads, which would value each download at 20 cents if the acquisition is successful.
Sega is a major player in the gaming industry, with a portfolio that includes Sonic the Hedgehog, Yakuza, and Total War. The acquisition of Rovio could further enhance Sega's position in the mobile gaming market, where it has already made significant strides.
The acquisition of Rovio by Sega could be a significant move for both companies. The deal would see the two companies leverage their respective strengths to capitalize on the mobile gaming market's growth. As the smartphone becomes more ubiquitous, mobile gaming is expected to continue growing in popularity, making it an attractive market for gaming companies.
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