10 Apr — 16 Apr / 2023

Weekly News Digest #15


# of announced deals
announced deals’ size
# of closed deals

Sega Acquires Rovio for $783m


Sega Acquires Rovio for $783m

Japan-based gaming giant Sega (TYO: 6460) has announced the acquisition of Finland-based mobile gaming company Rovio (HEL: ROVIO) for approximately $783m (€706m), or €9.25 per share and €1.48 per option. The deal is expected to close in Q3’23.

The price comes as a 63.1% premium to the closing price of January 19, 2023 — the exact date Playtika announced its intention to acquire Rovio with a 55% share price premium. Unlike with the Playtika’s bid, Rovio’s board of directors has already agreed to the deal.

Considering Rovio’s Revenue of ~$347m (€317.7m) for the year of 2022, the sum of the acquisition implies 1.7x EV/Revenue and 12.7x EV/EBITDA multiples, which is slightly bigger compared to the multiples from the Playtika’s proposal.

Multiples based on Rovio’s 2022 financial performance.

When it comes to Rovio’s current position on the market, we have already expressed our thoughts on that in one of our previous digests, when Playtika announced its plans to acquire the Finnish company. However, to get the full picture, we will reiterate some of those highlights there.

To us, it seems like Rovio’s valuation before the acquisition talks was significantly underrated. Just before the first bid from Playtika, the pre-proposal enterprise value implied 0.77x EV/Revenue, considering the company’s Revenue of €319.7m for Q4’21-Q3’22. For comparison, looking at the other publicly traded gaming companies, we see the EV/Revenue multiples closer to 1.5x or higher: Stillfront — 1.82x, Playtika — 2.28x (before the proposal). What Playtika (and Sega) did was bring the company’s valuation closer to that of the market, rather than overvaluing the company.

Of course, lower valuations are partially explained by the current state of the public markets, but there is much more to it in case of Rovio. The company went public in 2017 with €11.50 share price, which is almost two times higher than that of the day before Playtika’s proposal. Founded in 2003, Rovio is best known as one of the pioneers of touch-screen gaming, as well as the creator of the legendary Angry Birds franchise. Since 2009, when the first Angry Birds game came out, the company launched 20 more games in the series, as well as several spin-offs and transmedia products.

Games gross bookings and custom contracts, €m. Source: Rovio

However, the tremendous legacy is where most of both the strengths and the risks of the company come from. Rovio’s currently best-performing title, Angry Birds 2, was released back in 2015. For comparison, in Q4’22, the latest installment in the franchise, Angry Birds Journey, generated 6.6x times lower Revenue than Angry Birds 2. The second best-performing game, AB Dream Blast, came out in 2019 and is also pretty far behind AB2. That said, Rovio seems to be struggling to reach its past heights with new installments in the series. Nevertheless, despite the dependence on the company’s older games, the company had a solid €182m of cash and cash equivalents on its balance at the end of 2022. These resources not only support the company’s current operational activity, but also may allow it to continue working on the 10 new titles that are currently in development.

So why did Sega decide to go for the acquisition?

First, it’s about further mobile expansion. Though Sega is best-known for its PC & Console gaming titles, it has a solid mobile gaming portfolio that generated around $264m of IAP Revenues for the last 12 months, according to Most of the Revenue is generated by the rhythm game Project Sekai Colorful Stage Feat. Hatsune Miku. The most important thing here for understanding the deal, however, is that the vast majority of mobile Revenue is coming from Japanese players. Acquiring Rovio will allow Sega to geographically diversify its mobile Revenue flows.


Apart from the geographical expansion, the acquisition will bring additional expertise across many segments of mobile gaming: while expanding the Angry Birds franchise, Rovio has gathered expertise across various genres — not only casual and puzzles, but blast, side-scrolling shooter, arcade racing, RPG, and even a Roblox game (yet casual is where the company has its greatest expertise). We can also imagine Angry Birds-based special events or other IP collaborations in various mobile games by Sega.

Second, It’s about IP. Yes, we see that new Angry Birds games don’t reach the results of their older installments. However, it is still a well-known and widely recognizable franchise with its own merchandise, comics, film, and TV adaptations. The latter is something Sega has been especially successful in lately — Sonic the Hedgehog movie brought in $319m at the box office, while the sequel generated $405m. The Angry Birds Movie showed similar numbers with $352m box office. Thus, the deal may bring potential crossovers not only in gaming, but in other transmedia activities.

Speaking of crossovers, we have already seen one back in 2015, in Sega’s West-oriented mobile game Sonic Dash. The game had a special event, where gamers could play a set of themed Angry Birds levels with Sonic in them. Considering how many things based on the Sonic franchise we have seen lately, there are more opportunities for crossovers today than ever before.

Why Sega, not Playtika?

It’s still not 100% clear. However, when we were writing about Playtika’s bit, we mentioned Playtika shutting down its subsidiary gaming studio Seriously, laying off 600 employees (more than currently work in Rovio), after laying off 250 people before that. We assumed that this “might be serious reasons for Rovio not to go for the deal, if there happen to be no tangible business and synergy opportunities between the companies.”

We don’t know whether Playtika’s layoff history influenced the decision, but if we are speaking about synergies, there seems to be much more between Sega and Rovio: both have strong international IPs that have had a significant influence on the gaming industry as a whole; both have success stories of transmedia activities, and both have IPs that can appeal to younger and older audiences — in other words, on the surface at least, both companies have a lot to offer to each other in terms of creative and business collaboration.

But let’s also bear in mind that mobile gaming is going through hard times: post-IDFA pressure, increased UA costs, and not-so-efficient app store features, among other things, make it much harder for new titles to survive, much less prosper. Even the above-mentioned Playtika has stopped producing new games until the mobile market environment changes. In this sense, Rovio’s owners may have found a great exit strategy in the Sega deal.

We want to thank MGVC and The Games Fund for supporting this digest.

Frame 482023

TGF Investgame



Swedish gaming company Aonic Group has acquired a majority stake in UK-based multiplatform games developer Milky Tea, mostly known for its title HyperBrawl Tournament. The sum has not been disclosed. After the acquisition, Milky Tea will continue the development of its several undisclosed titles, as well as grow its workforce.

India-based video editing tools developer VideoVerse has acquired US-based gaming video creation platform for an undisclosed sum. Reely uses AI to allow gamers to easily create gameplay video clips and highlights with an automated video editing process. This acquisition is an opportunity for VideoVerse to expand and enhance its technologies and workforce, as well as fill a new market niche.


Gameta, a Spain-based Web3 gaming platform, has raised $5m in Seed funding round. Binance LabsHuobi Ventures, and others have participated in this round. The funding will be used towards accelerating the development of the platform, its ecosystem, and expanding its market presence.

UAE-based Web3 games developer MoonGaming has raised $3m in a funding round led by Singapore-based Web3 investment firm DWF Labs. The sum will be used o to further develop its main title Medieval Empires, a Web3 online strategy game, which is currently available in early access.

Turkey-based mobile games developer Grand-Attic, formerly known as Hadi, has raised $5.3m in a Seed funding round led by Makers Fund, with participation from Tripledot co-founder Akin Babayigit, Coda Labs co-founder Şekip Can Gökalp, and Griffin Gaming Partners. Grand-Attic is going to move from Istanbul to London and expand its workforce.

Singapore-based mobile games developer company CEBG Studio has raised $3m in a funding round led by Web3 investment firm Youbi Capital, with participation from A&T CapitalHashkeyKernel VenturesGSR VenturesWelight CapitalIGGPepper and Bing Ventures. CEBG is currently developing an eponymous blockchain-based online mobile game, which combines MOBA and Battle Royale gameplay elements.

India-based mobile games developer Mayhem Studios, a subsidiary of Indian gaming company MPLhas raised $20m in Series A funding round led by Sequoia Capital India. The round also saw participation from Steadview Capital, and others. Mayhem Studios is a AAA mobile games developer. Its main title is Underworld Gang Wars, a Battle Royale set in India, with two feuding factions. The game is still in development.


US-based video game company Take-Two Interactive Software (NASDAQ:TTWO) announced an underwritten public offering of Senior Notes to raise $1B, consisting of:

— $500m of its 5% Senior Notes due 2026;
— $500m of its 4.95% Senior Notes due 2028;

The offering is still subject to satisfaction of customary closing conditions, and is expected to take place on April 14, 2023. Part of the net proceeds will be used to repay in full its outstanding term loan and matures, and other part for general corporate purposes, including the repurchase or retirement of the Company’s other outstanding indebtedness.