Sega Acknowledges Acquisition of Rovio Has Not Met Expectations, Cites Competitive Mobile Landscape

Sega has recently announced a $200 million write-off from its acquisition of Rovio, the developer behind Angry Birds, which was purchased for $776 million. The company noted that the profitability of its mobile gaming division has not matched earlier forecasts, signaling that financial returns have been less favorable than anticipated. In April 2023, Sega revealed plans to acquire Rovio for the substantial sum of $776 million, aiming to leverage Rovio's expertise in mobile gaming to enhance Sega's presence in that sector. The deal was finalized in September of the same year. In its latest financial disclosures, Sega Sammy acknowledged that while Rovio possesses strong development and operational skills in mobile gaming—a sector with significant growth potential—the landscape of the global mobile gaming market has changed rapidly. The company cited the emergence of several major titles in quick succession and increased competition for acquiring customers as key challenges. This has led Sega to inform shareholders about substantial losses and a revision of its operational forecasts. Sega stated, "Rovio found it difficult to advance its initially planned business development, and the profitability of this business has fallen below the initial forecast." Due to a significant reduction in the "recoverable amount" associated with the acquisition, Sega has written down $198 million (around ¥30.4 billion), effectively reducing Rovio's valuation to approximately $578 million—$200 million less than the original purchase price. Rovio is part of a broader portfolio for Sega, which also includes well-known developers such as Relic Entertainment, creators of Company of Heroes, and Two Point Studios, known for Two Point Campus. Notably, the company is also home to Atlus, the team behind the acclaimed Persona series. On a positive note, Sega’s flagship Sonic franchise remains strong, with the recent release of Sonic Racing: CrossWorlds earning a remarkable 9/10 in reviews for its impressive character lineup, engaging tracks, and extensive customization options.