The Wall Street Journal says that Sega is almost ready to pay a huge $1 billion to buy Rovio Entertainment, the company that owns the Angry Birds mobile game brand. People who talked to WSJ say that Sega may seal the big deal by the beginning of next week.
Given that the Angry Birds games are becoming less popular, it seems strange that Sega and its parent company, Sega Sammy Holdings, would want to spend so much on Rovio. The first game came out in 2009 and was a huge hit, but since its peak in 2014, when Rovio announced falling profits and layoffs, the franchise seems to have lost steam.
The Angry Birds Movie, which Rovio made in 2016, was a success at the box office and is still the seventh highest paying video game movie, even though the reviews weren’t good. The Angry Birds Movie 2, which came out in 2019, did not do as well. Rovio watched as games like Candy Crush got more and more popular and took away from Angry Birds’ popularity.
Rovio recently took the first Angry Birds game off the Google Play Store and changed the name of the iOS version to “Red’s First Flight.” The move seems to have been made to get players to switch to the more profitable freemium versions and hide the fact that the original game could be bought once and played for life.
Rovio and Israeli producer Playtika were close to making a $800 million deal for Playtika to take over, but those talks ended for good in March. Now, Sega may soon own the Finnish company that makes Angry Birds instead.
The first Angry Birds game from Rovio was the first mobile game to hit 1 billion downloads. This was a record that was confirmed by Guinness World Records, and as of last year, Rovio said that all of its games had reached 5 billion downloads.
So there might be a case for valuing the company at a fifth of a dollar per download. Remember when Take-Two spent $12.7 billion to buy the social game company Zynga?
Maybe Sega has a new group of heroes that are just as good as Sonic and his friends. They are just waiting for a great mobile game series to get them going.