Playtika Offers to Take Over ‘Angry Birds’ Owner

The stock of the company that owns the popular "Angry Birds" mobile game franchise experienced a surge on Friday after announcing that they had been offered a 751 million euro takeover bid, which is equivalent to $813.5 million, from a competing game developer. This comes as the gaming industry is seeing a slowdown, leading to more consolidation.

Rovio's stock price is currently at 35.80%.

Entertainment Oyj, a company that was instrumental in the development of the mobile-gaming industry, announced that it has received a 9.05 euro-a-share offer from Israel's Playtika PLTK 7.38%.

Holding Corp. presented a more attractive proposal after having previously made an 8.50 euro offer that had not been made public.

Rovio, a Finnish company, stated that they are not currently in negotiations with Playtika, but they will assess the offer and decide how to move forward. The company's shares rose 40% in the beginning of trading to 7.96 euros, but then decreased slightly.

Playtika is an expert in creating casino-style mobile games, but recently it has expanded its portfolio by purchasing casual games similar to "Angry Birds".

Playtika expressed that they are confident that the combination of Rovio's intellectual property, user base, and their own monetization and game operation capabilities will be beneficial to shareholders.

The mobile game "Angry Birds" was released in 2009 when smartphones and the mobile-gaming industry were still in their early stages. This game was simple yet highly addictive. Players use a slingshot to launch their birds over, under, and through various obstacles in order to take out the green pigs that are trying to steal their eggs.

Rovio reported last year that its games catalog had achieved a milestone of 5 billion downloads, and that the title was the first mobile game to reach 1 billion downloads.

Rovio has capitalized on the success of the original game by releasing multiple sequels, in addition to TV shows and a movie in 2016. In late 2017, the company went public in the stock market in the hopes that the listing would further its growth objectives.

Despite the success of "Angry Birds", Rovio has not been able to replicate that success with its other game titles. The franchise, while still popular, has been overshadowed by newer competitors in recent years.

Despite the challenges of the past year, Rovio had a successful 2022, with a 16% increase in revenues to 241 million euros in the first nine months of the year compared to the same period in 2021. Additionally, profits during the period rose 9% to 33 million euros, according to the company.

Playtika's acquisition of Rovio comes at a time when the gaming industry is experiencing a post-pandemic slowdown. According to Newzoo, a games industry data provider, mobile game revenues dropped 6.4% year-over-year to $92.2 billion in 2022. Mobile games make up half of all videogame revenues, and are worth as much as console, PC and online videogames combined.

The economic downturn has caused a surge in mergers and acquisitions, particularly Microsoft Corporation's $75 billion purchase of Activision Blizzard Inc.

In December, Playtika revealed that it was cutting its workforce by 15%, resulting in the loss of 600 jobs.