Sega nears deal to acquire Angry Birds maker Rovio for $1 billion

Fbh said:
Seems way overpriced for a company whose main product isn't nearly as popular as it once was.

According to their site their revenue in 2022 was $317 million and the operating profit was $39 million. Hardly seems worth the billion dollar investment specially with nothing exciting on the horizon.
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What exactly is Rovio spending $278 million on?
 
Shubh_C63 said:
It must be solely for the IP because what exactly Sega can learn from Rovio/Angry Birds. Sega has more knowledge about mobile game making and merchandising.
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I'm curious about how you arrived at that conclusion because, to me, the opposite seems to be true: Sega is buying Rovio more for their expertise and knowledge than for their actual games/franchises.

Rovio has had significantly more success with mobile games than Sega, and the difference is quite substantial. Rovio has an enormous amount of experience and expertise in developing mobile games and launching cross-media franchises.
 
Rykan said:
I'm curious about how you arrived at that conclusion because, to me, the opposite seems to be true: Sega is buying Rovio more for their expertise and knowledge than for their actual games/franchises.

Rovio has had significantly more success with mobile games than Sega, and the difference is quite substantial. Rovio has an enormous amount of experience and expertise in developing mobile games and launching cross-media franchises.
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I figured Sega has had been making mobile games since so long compared to Rovio. I really don't know how Sega fared in modern mobile platform though.

If it's the other way around than it makes sense.
 
If EA and Spielberg managed to market Boom Blox better things would have been very different as they were first to market (to the point I could see Angry Birds made as just Boom Blox ripped off for mobile 1.5+ year later, months after the sequel even).


They definitely saw the future, just didn't quite manage to capitalize on it effectively on a mainstream platform. Maybe they didn't focus the marketing on the animal things enough past the first trailer even though it's themed around them? I have no idea.


It's a shame as they were actually very well produced games from the start and probably with the creativity of the whole Angry Birds series already laid out within just two games rather than withhold and trickle out new concepts and themes so very slowly.​
 
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Surely they will go where no man has gone before and use the mobile money to create new or bring back old IPs on non-mobile platforms.
 
Honestly thought it was a cheap buy as soon as I saw the thread title.

But now wonder why other big players like Microsoft stayed on the side lines for this one and didn't make a move? Or maybe they did but Sega was the better deal?
 
Alexios said:
If EA and Spielberg managed to market Boom Blox better things would have been very different as they were first to market (to the point I could see Angry Birds made as just Boom Blox ripped off for mobile 1.5+ year later, months after the sequel even).


They definitely saw the future, just didn't quite manage to capitalize on it effectively on a mainstream platform. Maybe they didn't focus the marketing on the animal things enough past the first trailer even though it's themed around them? I have no idea.


It's a shame as they were actually very well produced games from the start and probably with the creativity of the whole Angry Birds series already laid out within just two games rather than withhold and trickle out new concepts and themes so very slowly.​
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I'm pretty sure the angry birds style game was around for a looong time. It's basically a one sided Worms. And Worms was an evolution of the game type, it was the sort of thing you would see in public domain on the amiga.
 
poppabk said:
I'm pretty sure the angry birds style game was around for a looong time. It's basically a one sided Worms. And Worms was an evolution of the game type, it was the sort of thing you would see in public domain on the amiga.
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I didn't say it was the first physics based block/structure breaking game or any super vague concept like that. But it's basically Angry Birds before Angry Birds to a T. All in the same trying to appeal to the casual user age of Wii & browser & mobile era. Before Crush the Castle even.
 
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Clever of Sega to purchase a mobile developer when they know that's the market Microsoft is targeting.

Like a turkey being fattened up for slaughter acquisition.

In reality, it's possibly a good thing for Sega with another revenue stream, and another dev with market specific knowledge capable of porting some more classics to mobile.
 
Where is Sega getting a Billion $$?

Sega Sammy Holdings Enterprise Value: 3.368B for April 6, 2023. Revenue: 2.68B (2022). MrktCap: $4.54B

Who would even loan them the money based on those financials.
 
hemo memo said:
And i'm gonna quote this post here so people know how awful this deal is:
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Good or bad deal. I'm not worried for Sega:
During and after the pandemic, most mid or major publishers did a crazy amount of money (Sega greatly limited the arcade programmed losses, for instance).

Plus, video games is a growing market.
If you're an old legendary company like Sega you will make a lot of profits by only selling classics remasters...somehow, companies like Sega will be able to survive debatable decisions.(according to financial reports back catalog is selling more and more...that's why publishers are double dipping on remasters, remakes)

Overall, Sega will do fine in the future anyway.
 
Fbh said:
Seems way overpriced for a company whose main product isn't nearly as popular as it once was.

According to their site their revenue in 2022 was $317 million and the operating profit was $39 million. Hardly seems worth the billion dollar investment specially with nothing exciting on the horizon.
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Maybe sega thinks they can make it more profitable.
 
When I see figures bandied about for a company worth imo a quarter of it's price it's gotta be the underlying technology/patents that sega is buying which has gotta be where the value is, then again isn't Angry Birds a fairly recognizable name? I know the two movies where never off in my house for a while, the first one being actually really good and I've seen plenty of merch about the place
 
adamsapple said:
Rovio generated 317 million euros in revenue last year. This investment will pay off and start earning a profit for Sega in a very short amount of time.
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But their profit margin is around 12%.
It's going to take decades to pay off that 1Billion cost.

Look at the Adjusted operating profit margin. % for 2022.
investors.rovio.com

Key financials

Rovio Entertainment Corporation is a global mobile-first games company that creates, develops, and publishes mobile games.
investors.rovio.com investors.rovio.com
 
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Angry Birds was a huge fad back in like 2010, when I was still on Android 2.0. I didn't even know people still played this. How can a mobile game IP be worth a quarter of Star Wars? It's quite incredible I think.
 
Oh I remember when I first heard about Angry Birds. It must have been around 2010 or so and I met some hipster guy at a party. We started talking about video games and he told me he had an app on his iPhone, which was the best game he had ever played.

"I'm not kidding, I've been a gamer all my life and this game is as good and revolutionary as Super Mario Bros. Seriously! Probably even better!"

It was called Angry Birds.

Whoah, that sounded almost too good to be true!? Boy was I ever disappointed when I finally tried the game myself the next day. I think that was actually the moment when I started hating smartphone games 🤔

Anyway, I'm sure Sega knows what they're doing.
 
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feynoob said:
That is the limitation of having 1 ip,
With Sega content, that profit could soar higher.
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Great for SEGA I guess. But as a guy playing on home/handheld consoles, this is close to least interesting way they could spend their money.

I guess I will reading more news of mobile games starting and ending service.
 
adamsapple said:
Rovio generated 317 million euros in revenue last year. This investment will pay off and start earning a profit for Sega in a very short amount of time.
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Revenue =/= Profit

Sega's MC is around 4B$, so they literally just spent 1/4th of their whole business aquiring Rovio which profits around 40M$ a year, which means, it would take them over 25 years to break even, and this is not taking into account how relevant angry birds will be in 5 years time.

Yup, such a good deal for Sega

Edit : "In 2022, Rovio Entertainment generated an annual net income of 22.87 million euros, down from 30.14 million euros of profit for the period in the previous year." Its actually way worse than I expected, at this pace it would take over 50 years. Stop the madness!
Iv1KeXc.png
 
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Probably even if the IP seems pretty dead, an Angry Birds 3 could alone make enough money to make the deal worth. Or ar least this have to be what SEGA is thinking.
 
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Shubh_C63 said:
I figured Sega has had been making mobile games since so long compared to Rovio. I really don't know how Sega fared in modern mobile platform though.

If it's the other way around than it makes sense.
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Sega's mobile efforts have done pretty badly. I think they are acquiring Rovio to get mobile expertise, similar to how Sony acquired Bungie for GAAS expertise
Hip Hop said:
Honestly thought it was a cheap buy as soon as I saw the thread title.

But now wonder why other big players like Microsoft stayed on the side lines for this one and didn't make a move? Or maybe they did but Sega was the better deal?
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They are looking at other mobile companies. Take 2 has acquired Zinga, EA got Glu Mobile and Playdemic, and Microsoft is in the process of getting King.
 
Does King still make a load of money off candy crush? Seems strange to swoop up mobile devs like a decade after their prime. Or maybe I just don't know shit and that's most likely the case.
 
DKPOWPOW said:
You stupid fucks couldn't finance a Shenmue III correctly, but you go and spend a billion on fucking Angry Birds?
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Pawl... I'm doubtful about the deal but Shenmue ? Seriously ? The serie had a window in the early 2010's at best.
In 2023, 90% of the people that could have loved Shenmue are more attracted by the Yakuza serie.

I know that's a different type of game but otakus, weebs, japan geeks often prefer the Yakuza settings in Japan (modern and medieval) over the chinese areas of Shenmue.(1986 Yokosuka in japan isn't enough for them...In Yakuza you have Yokohama, Osaka, Sapporo, Hiroshima, Okinawa...).

I know it's an unfair comparison (Yakuza has much more episodes) but it is what is.

Shenmue had a window. This window has been closed by Kiryu.Yakuza is finally more popular than Shenmue.
Sorry. (A shenmue fan)
 
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Azzurri said:
Wait, Sega has this much buying power?
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Sega makes a lot of money with Sonic movies, TV Shows, dolls, goods, mobile games, new contract for Streets of Rage, Comix Zone, Space Channel 5 movies, remasters, funds from Nexon etc.

PS: Sonic movies grossed combined almost $750 million with Pandemic for the first one, and Paramount+ deal for the second (it was still popular but they stopped it in theaters to cast it on Paramount +.)
Add more stars for the third episode and more Sonic Friends, it will pass $500 million easy.
 
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Rockondevil said:
Lucas might as well have given it away.
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I think that is kinda what he did. After all the backlash for the prequel trilogy you could tell he was hurt and disappointed, and because of that he went "fuck Star Wars, fuck you all, I'm out" and sold it to the first bidder.
 
Woopah said:
Sega's mobile efforts have done pretty badly. I think they are acquiring Rovio to get mobile expertise, similar to how Sony acquired Bungie for GAAS expertise

They are looking at other mobile companies. Take 2 has acquired Zinga, EA got Glu Mobile and Playdemic, and Microsoft is in the process of getting King.
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The whole Sega group's biggest earner is the Miku mobile game....
 
But honestly...Sega has a BILLION dollars to throw around?! Those movies must've done WAY better than I thought!
 
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