Sonic the Hedgehog wants to crunch the Angry Birds for more than 700 million euros: Japanese Sega announced on Monday April 17 that it was launching a friendly offer to buy Finnish Rovio, known for the successful franchise of birds shot like projectiles. It is therefore the end of the independence of the Finnish flagships of mobile video games after the takeover of Supercell (“Clash of Clans”, “Hay Day”…) by Japanese companies, then by the Chinese Tencent in 2016 .
Since the global success of “Angry Birds” at the turn of the 2010s, Rovio had remained very dependent on its license for failing to sign a new flagship game. Founded in 2003 by three computer science students in Helsinki, the small Finnish company had gained worldwide notoriety by launching its famous game.
Despite a follow-up to its video game, film, amusement park and children’s book versions, as well as an IPO in 2017, its growth had plateaued in recent years.
Sega’s offer, which represents a 19% premium to Rovio’s closing share price on Friday, is part of the popular Japanese brand’s “long-term goal” to expand into mobile video games, explained the two companies in a joint press release. Rovio, which employs around 500 people, recommended shareholders take the offer of 9.25 euros per share, as the stock jumped 17.8% to 9.16 euros on the Helsinki Stock Exchange.
Today, however, the Finnish’s ability to repeat a worldwide success seems uncertain in the eyes of analysts. Rovio had a modest turnover of 317.7 million euros last year, for a net profit of around 31 million.
Sega, which expects to complete the acquisition between early May and July, intends to finalize the acquisition during the third quarter. A major video game player in the 1980s and 1990s with his Mega Drive consoles, the Japanese is known for his famous character Sonic, the lightning-fast blue hedgehog. But the firm then seriously declined, having failed to impose its consoles against Nintendo and its Super Mario, as well as Sony and its PlayStation.
Beyond the creation of video games, the group, which has been called Sega Sammy Holdings since 2004, is also very present in arcade games and pachinko machines (cross between pinball machine and slot machine) in Japan, a field of activity whose decline has nevertheless accelerated in recent years due to the Covid-19 pandemic.
Games on smartphones are therefore seen as a lifeline by the group, which achieved an annual turnover of 381.5 billion yen (about 2.6 billion euros) last year, for a profit net of 31.5 billion yen (214 million euros).
With Rovio, Sega also gets its hands on the Finnish mobile gaming platform, Beacon, Rovio’s other main asset. However, Finland retains a significant independent video game publisher, with console game specialist Remedy Entertainment and the Alan Wake franchise.
