Sega and Rovio: a perfect match or ‘two drunks holding each other up’?


Spare a thought this week for Playtika, which fired the starting gun on what eventually became Sega’s $776m acquisition of Rovio.

The Israeli firm launched a public bid to acquire Rovio in January, having already offered to buy the Angry Birds maker privately in November 2022.

It prompted a strategic review at Rovio, which started talking to other suitors as well as Playtika. But Playtika’s track record with other Finnish companies made it an unpopular choice as a new owner, and by March the deal was dead.

And so up steps Sega, which has some footprint in mobile, but clearly not enough.

This week we asked several insiders and industry figures for their thoughts on the Sega-Rovio deal – here’s what they said:

First up, some suitably spicy thoughts from Eric Kress of Gossamer Consulting and Deconstructor of Fun:


“Well what is clear is that Rovio did not want to get bought by Playtika! Sega only offered a few dollars more…this is another classic example of ‘two drunks holding each other up’

Not as cut and dry as Unity-IronSource, where both were wasted, this one is more like Rovio has had 6 beers…and Sega has had 12.

For Sega they have had very little success in mobile or console for that matter. The only Sega game in mobile that matters is Hatsune Miku, a rhythm game that is a juggernaut and represents about 70% of their in-app purchases and 90% of that is in Japan.


The rest of the business is primarily Sonic stuff which has a ton of downloads and makes very little money. So Sega is not a very successful mobile game developer despite some strong IP, particularly in the west.

I think it is important to understand that Sega has been flatlining for a decade on their video game business as a whole.

This deal values Rovio at roughly 2.2x revenue and 13x adjusted EBIT. Not a terrible valuation but still a little steep given the future of the market. I do think Rovio is in a much better position moving forward in the Apple mobile game recession with such big brands, though.

This is a far cry from Rovio’s rumoured valuation during its heyday, when the management team thought they would become the next Disney. They were hoping for a valuation of close to $2bn at the time but when they went public in 2016 they were worth $1.1bn – so seven years later getting sold for $775m is a very bad result for shareholders.


For Sega they get a western developer for a reasonable price with amazing IP. My only concern is I don’t see many synergies at all.

This creates, in essence, a western development arm for Sega. An independent developer in Helsinki to build games for the west. The hope will be to leverage Sega IP using Rovio’s expertise, but this does not help push Rovio to get better at leveraging its own IP. It seems to solve Sega’s problem to some degree, but not Rovio’s issues.

This leads to my second issue: culture. I can’t remember a time when I have heard the words ‘working for a Japanese company is great’.

Japanese companies are managed very centrally. Sony, to this day, is beholden to the overlords in Japan even though the lion’s share of their business and market is in North America and Europe.


At Sega it is particularly bad, from my understanding. You are basically dealing with three different contingents: console developers at Sega, IP holders at Sega and mobile professionals.

All three have conflicting priorities: console publishers want to support their game launches, IP holders want to insure the sanctity of their brands and mobile game makers want to make money in mobile. And corporate is somewhere up top.

These three groups can never really align and ultimately the IP holders have the final say. Given their history Sega will focus on console launches, and what that means is the IP holders sacrifice making money in mobile games to promote and market console launches.

If they give their biggest IP – Sonic – to Rovio and try to build a successful game, a game that monetises, it might be impossible to get approval from the IP holders in Japan. This would create an infuriating approval loop that would leave the Rovio developers frustrated and basically unable to move forward with the proper game design.

Overall I think this deal is a bit ‘meh’ – it solves potential issues for Sega but doesn’t solve issues at Rovio.”


Next, we asked a well-placed Rovio insider for their ‘off the record’ thoughts on the deal:

“After the heated reaction from employees towards the Playtika advances, it seems like Rovio has found a more palatable acquirer in Sega, and the atmosphere seems more excited than reserved.

From the perspective of the headline IPs, Angry Birds and Sonic seem like a good match of brands to exist under the same roof: great brand recognition and products on multiple gaming platforms, and with entertainment and brand licensing potential.

I think Rovio is a company that can deliver consistent results and add more mobile footprint for Sega. The only question mark is whether Rovio will still strategically invest in figuring out the future of gaming with forward-leaning projects, or if their operations will be tightened down to deliver profits for Sega.

All in all, this is a respectable outcome for Rovio ownership, and another exciting new beginning for the company and its studios.”

Sandsoft Games CEO David Fernandez also sent us his thoughts on the deal:

“In addition to the success of the Angry Birds IP in both games and film, Rovio has also built the publishing platform Beacon which helps its teams to smoothly and efficiently operate live games.

As such, it did not surprise me when I saw the announcement of Sega’s acquisition of Rovio; particularly after Rovio declined the non-solicited bid from Playtika. Helsinki as a region is still recovering from the impact that Playtika had on the closure of subsidiary studio Seriously.

Sega’s acquisition of Rovio provides value for the following reasons:

Rovio can expand game development to console and desktop as initially stated in the opening of Rovio’s studio in Montreal Canada. Plus, Angry Birds can continue to expand to other forms of entertainment; mirroring what Sega has done with Sonic.

Sega can apply Rovio’s mobile game-as-a-service expertise to games such as Sonic Dash or Football Manager.

In summary, consolidation in the games industry is speeding up and – for companies looking for impactful M&A transactions – there are fewer mid-sized organisations to bid for. I can’t wait to see whether the next bold move comes from Sony, Microsoft, Amazon, Facebook or Netflix.”

And the final word goes to Rovio vice president of marketing Luis de la Camara, who said on LinkedIn that Sega’s three big motivations for the buyout were Rovio’s “world-famous cross generational Angry Birds IP,” “mobile free to play expertise, especially in UA and live ops” and its “incredibly powerful one of a kind games-as-a-service platform Beacon.”

He added: “I am so proud of everyone at Rovio that has made us such a hot acquisition target recently! This is thanks to your passion, dedication and your mobile free to play expertise!”