Sega to buy 'Angry Birds' company Rovio for $1 billion

According to The Wall Street Journal report, Sega is about to close the deal of buying Rovio Entertainment. Rovio owns the Angry Birds mobile game franchise for a whopping $1 billion. According to people who spoke to WSJ, Sega may close the big deal early next week.

It's surprising that Sega, precisely its parent company Sega Sammy Holdings, would want to spend the massive amount on Rovio, given the waning popularity of Angry Birds games. The original game was an enormous success in 2009; the franchise slipped from its peak in 2014 when Rovio reported declining profits and layoffs.

In 2016, Rovio tested for a film adaptation, The Angry Birds Movie, a box office success that remains the seventh highest-grossing video game movie, even if the reviews weren't kind. But, unfortunately, its 2019 sequel, The Angry Birds Movie 2, failed to achieve the same success. Instead, Rovio saw competitors like Candy Crush grow bigger and bigger, eating away at interest in Angry Birds.

Rovio recently removed its original Angry Birds game from the Google Play Store and renamed the iOS version Red's First Flight. The move was made to move players to its lucrative freemium sequels and obscure the buy-once-play-forever business model of the original game.

Rovio previously approached an $800 million deal for Israeli developer Playtika to take over, but those talks officially died down in March. So now, Sega could soon own the Finland-based company Angry Birds.

Rovio's original Angry Birds game was the first mobile game to get 1 billion downloads (a record certified by Guinness World Records). Furthermore, Rovio claimed that its combined library of games had reached 5 billion downloads in the last year. So maybe there's an argument for the company to price it at a fifth of a dollar per download.