Sega buys Angry Birds for $776M as OG game makers go big on mobile franchises
New nest, who dis… Rovio, the company behind viral bird-chucking game Angry Birds, yesterday agreed to be bought by Sega for about $776M. Sega is the legendary Japanese console and game maker behind franchises like Sonic the Hedgehog. Now it wants to take its IP to the small screen by tapping Rovio's mobile-game expertise and iconic franchise.
- Good egg: Angry Birds, launched in 2009, apparently became the first mobile game to be downloaded 1B times. Since then, it's been spun off into movies, cartoons, and more.
- Your Angry Bird is waiting… Sega can leverage Rovio’s “live service” strategy, which uses frequent game updates to keep players coming back (think: notifications). And Rovio can use Sega to expand to non-mobile platforms.
Mobile-gaming madness… The pandemic sparked a surge in scrolly-tappy gaming as couch-bound players splurged on extras like custom avatars and power-ups. Mobile-gaming revenue (finally) cooled 6% in the first quarter of last year, but was still up nearly 30% from prepandemic level. Now old-school gaming companies want in:
- Sweet deals: Last year Take-Two bought Farmville maker Zynga for a whopping $12.7B. And in 2019 Activision snatched up Candy Crush parent King for nearly $6B.
- Palm-sized: Nintendo has already made billions from dropping smartphone versions of its popular console brands (think: Pokémon GO and Mario Kart Tour).
Small screens can turn into big hits… Sega predicts that by 2026 mobile games will make up 56% of the global gaming market (up from 53% last year). By snatching up smaller companies with franchise buzz, companies like Sega can also cash in on franchises (like movies, shows, and toys). This month, Nintendo’s “Super Mario Bros. Movie” became the highest-grossing video-game flick of all time.