Sega to Buy Angry Birds Creator Rovio for $1 Billion, Says Report

Rovio, the maker of the classic mobile hit Angry Birds, is rumoured to be acquired by Sega’s parent company, reports the Wall Street Journal.

According to unnamed sources, Japan’s Sega Sammy Holdings is set to acquire Rovio Entertainment, for approximately $1 billion. The deal is expected to be finalized by early next week, subject to the talks not breaking down or being extended.

Finland-based Rovio Entertainment went public in 2017, but has since struggled to replicate the success of its popular mobile game. Rovio was in talks with rival company Playtika Holding Corp. last year for a sale worth over $800 million, but the negotiations ended without an agreement.

Sega Sammy Holdings, a Japan-based entertainment conglomerate, was created in 2004 through the merger of Sega Corp., known for the popular video game character Sonic the Hedgehog, and Sammy Corp., a Japanese slot-machine company. The company offers a range of entertainment products including arcade games, toys, and animated video content.

The acquisition of Rovio Entertainment will add to Sega Sammy Holdings’ existing portfolio of entertainment products and further diversify the company’s offerings.

This acquisition comes amidst a slowdown in global consumer spending on mobile games, which fell 6.4% last year to $92.2 billion, according to industry tracker Newzoo BV.

However, the industry remains active in deal-making, with Take-Two Interactive Software Inc. acquiring FarmVille maker Zynga Inc. for approximately $11 billion last year. In addition, Microsoft Corp.’s proposed $75 billion deal to buy Activision Blizzard Inc. is currently facing regulatory scrutiny in the U.S. and abroad.

This seems like quite the payday for Rovio, considering Angry Birds is well past its prime.