Video game company Sega is in talks to buy the creator of the mobile game Angry Birds

The Japanese company of video games Sega is in talks to buy Rovio, creators of the mobile game Angry Birds. The information was confirmed by Rovio this Saturday, 15. According to the company, the negotiations are part of its “strategic review”.

According to the statement, the two companies will release more information “at an appropriate time”, but there is no guarantee that the deal will close. The note also does not confirm values.

The sale is said to be valued at around $1 billion, according to sources at The Wall Street Journal. Those sources told the paper that Sega could close the deal as early as next week, as long as talks don’t stall or drag on.

Japan-based entertainment conglomerate Sega Sammy was created in 2004 from the merger of Japanese slot machine company Sammy Corp. and Sega Corp., the video game maker behind Sonic the Hedgehog. The company offers entertainment products including arcade games, toys and animated video content.

The success of Angry Birds

Simple yet addictive, Angry Birds is a pioneering mobile game released in 2009, when smartphones were still in their infancy. Players use a slingshot to shoot their birds over, under, and through various obstacles to take down squadrons of green pigs trying to steal their eggs.

It was the first mobile game to be downloaded 1 billion times, according to Rovio, which said last year it had reached the 5 billion download mark in its game catalog.

Based and listed in Finland, the company built on the original game’s success by releasing several sequels, as well as TV and film spin-offs. It went public in late 2017, hoping the listing would help its growth plans.

But Rovio failed to replicate the success of Angry Birds with subsequent games, making the company susceptible to takeover by a bigger rival, particularly as its own aging franchise has been eclipsed in recent years by newer rivals.

Rovio was previously in talks to be acquired by Playtika Holding Corp., an Israel-based rival, for more than $800 million. Those talks ended in March without an agreement.

Global consumer spending on mobile gaming fell 6.4% last year to $92.2 billion, according to Newzoo BV. Still, that’s about half of all game software sales, with the rest spent on console and PC games, the industry tracker estimates.

The slowdown, following a surge in demand during the pandemic, has added fuel to an already active environment for closing deals in the sector. Last year, Take-Two Interactive Software Inc. agreed to buy Zynga Inc., maker of FarmVille, for about $11 billion.

Soon after, Microsoft Corp. closed a $75 billion deal to buy Activision Blizzard Inc., known for its Call of Duty and Candy Crush franchises, although the transaction is facing regulatory scrutiny in the United States and abroad. In addition, Sony Group Corp.’s video game unit. agreed last year to buy Bungie, the studio that created the Halo and Destiny series, for about $3.6 billion. /DOW JONES NEWSWIRES