There is a big division going on in the gaming industry as distributors and publishers grab small gaming companies into their portfolios. But what do the Hedits in power in Rovio do?
When The last independent game studio to be sold in Finland?
This question arises when you look at the news flow in the gaming industry. Large gaming companies buy smaller ones almost daily.
Chinese techno giant Tencent acquired a 3.8 percent stake in May from the high-rise gaming house Remedy. Japanese Sony in turn acquired gaming company Housemarque in June.
Shopping is small on an entertainment scale. Housemarque has less than 100 direct employees and Remedy has less than 300 employees. Tencent employs tens of thousands and Sony more than one hundred thousand people.
Games the release is like a movie business. Development investments and marketing costs are high and a large part of the games remain unprofitable. The best games, on the other hand, are slot machines, whose life cycle is sometimes measured in decades.
When the risk-return ratio is so skewed, it’s worth doing as all investment guides advise: diversify. So do all the major gaming houses.
Big game distributors and publishers devour small game studios like Pacman’s white pixels.
Gaming industry according to statistics from the next Invest Game, the gaming industry is rapidly concentrating in the hands of large distributors and publishers.
More than 200 M&A transactions were made in the gaming industry last year. The buyer community is a small group. The six largest gaming organizers bought gaming companies for a total of about 15 billion euros. It accounts for four-fifths of all acquisitions in the gaming industry last year.
Publishing games is like a movie business. Development investments and marketing costs are high and a large part of the games remain unprofitable.
Remedy said in connection with the spring interim report that there are only thirty independent high-end gaming companies in the world from platforms and distributors. It is their ownership that is currently the toughest race.
Stake is the largest of the Finnish gaming houses in terms of turnover, but not the most beautiful by any measures. The company’s revenue has stagnated for years, even though the gaming industry has grown rapidly. The result was reasonable last year, but the stock price says it is essential. Rovio’s share price is 40 percent below the 2017 listing price.
Rovio has been involved in the gaming industry and acquired a small Danish gaming studio last year. The company is launching new games, but is still completely dependent on the fading Angry Birds brand. Last year, virtually all sales were related to bird games and brand licenses.
On the stock exchange has been expected since Rovio’s listing, when angry birds will move to a larger stable. Perhaps the strongest potential buyer is Sony, which just bought Housemarque.
Sony is a true conglomerate that does almost everything related to the electronics and entertainment industries. With Rovio, Sony would strengthen its position in mobile gaming. Perhaps Sony would dare to try another Angry Birds movie.
The situation became even more interesting in June when Rovio announced that it would start cooperating with the Moomin brand. In the future, Rovio will develop Moomin games and become the minority owner of Gutsy Animations, which is responsible for Moomin animation.
“Moomins has a very high brand awareness, especially in Japan, which is one of the largest gaming markets in the world,” Rovio said in a press release.
Looks like a slightly disguised flirtation towards Sony.
More than 40 percent of the company is owned by the Hed family, which includes, for example Mikael Hed and his father Kai Hed.
The owner family arranged its holdings in separate companies at the end of last year. It can be one signal of sales intentions.
However, the sale would hurt Hede.
In the golden age of Angry Birds, several billion price tags were set for Rovio. Even if Hedit would now receive hundreds of millions of euros from the sale of Rovio, the sale would mean a billion-dollar impoverishment from a reading less than ten years ago.