"Sega isn't limiting us": Rovio's first year after the €706m acquisition

It may not seem like it, but it's been just over a year since Sega acquired Rovio in a deal worth €706 million.

Now a subsidiary of Sega's Europe division, the Finnish-based Rovio has spent the past 12 months integrating into Sega and providing tools and support in expanding the Japanese firm's capabilities on mobile. These efforts will culminate in the release of its battle royale title Sonic Rumble this winter.

GamesIndustry.biz caught up with Rovio's vice president of strategy Timo Rahkonen at this year's Gamescom, who discussed where the partnership stands a year after the acquisition and what the industry can expect from the two companies.

Looking back to last April, Rahkonen notes that there was a "long process" before the acquisition, which gave Rovio the time to look into how Sega runs as a company, the actual scale of its business, and the IP and game portfolios it has – and whether it was the right fit.

"There were so many things that we were not aware of, and something that has been really exciting to hear is what kind of things they have done and the cool projects they're planning to do," he says.

"Everyone has some sort of impression of Sega, but because we've had the chance to work together for a year we're in a position where we have really learned what kind of company Sega is, and what kind of company Rovio is."

As for Rovio's experience of integrating with Sega over the past year, Rahkonen explains how they've had to adapt culturally.

"There are differences between a Japanese-owned company compared to us. But I think it's good that they have experience working with different studios in different locations because they have a presence across Europe, so they're used to working internationally.

"Of course you need to spend time to understand what kind of processes you have and values, as there are definitely some differences. On the other hand, we also try to respect each other and learn. I would say we're more straightforward in things, that's a very Finnish thing to do. We're not sales people, we're an engineering country and we're kind of shy but very open and transparent in how we operate and I think that's something that [Sega] value a lot."

Rahkonen describes Rovio's position at Sega as "rather independent" in that it has its own strategy and budget.

"It's not that we are completely isolated, but we operate a lot with different Sega studios and games. There are different stakeholders, Sega has a development team in Tokyo, but then it also has a Sonic team based in Burbank, California. We collaborate with the different teams as well, and we report to the Tokyo headquarters.

"It's been great to have a more direct relationship with the Sega executives because they also want this acquisition to become a very successful one. That [direct connection] helps to speed up things, make decisions faster, and maximise all the opportunities."

As for how Rovio has been helping Sega, its Beacon platform has been a major aid in streamlining development. Beacon provides developers with access to tools that help with publishing, updates, live operations, and user acquisition.

Rahkonen suggests that Beacon is something that Sega "could utilise across all of its games" in the future. For example, he explains how the development platform is being integrated into Sonic Rumble – a project that Rovio and Sega are working on together.

"It's good to know that Sega isn't limiting us – everything is about the business opportunity"

"The game is developed in Japan, but Rovio is responsible for the marketing, user acquisition, community and 'go-to-market' type things," he explains.

"Sega has a really capable team developing that, but it's their first live service mobile game targeted for Western audiences. So Rovio is helping with how to make the game successful, especially in the US and other Western countries because those are the regions where the Sonic brand is very popular."

Rahkonen also brings up the Japanese title Project Sekai Hatsune Miku, which Rovio is helping to grow overseas for Western audiences and is also integrating Beacon into. However, Sonic is the top priority for now.

"Sonic has been the main focus area because it has an existing presence, and Sega are investing a lot in the Sonic IP," he says.

"We also identified that while Sonic is a really popular IP, it hasn't been that successful on mobile even though it's very successful on PC and console.

"If you look at the whole IP portfolio that the company has, it's very broad. They have been developing [it for over] four decades. And on mobile, which is what Rovio is focusing on, Sega hasn't done that much. So we will start with Sonic, but in the future I think there will be opportunities to work on other IPs as well."

Rahkonen emphasises that Sonic is the starting point of this partnership. There are many other games he'd like to see Rovio work on, mentioning IPs such as Persona and Yakuza, but he says Rovio currently "doesn't have the capabilities" to work on these.

"Those could also be something that we either build the capabilities for or acquire in another way," Rahkonen adds. "We know user acquisition and the go-to market areas so we could [add some value there]. The challenge is that there are so many opportunities, so you need to pick [wisely] as everyone has a limited number of teams to work with, so what are the most potential ones – what are the ones that can create business but also create value for the players as well."

Sonic may currently be the key focus, but Sega is more than open for Rovio to work on other franchises in its portfolio.

"If you want to create something new – it takes time. You need to build the foundation. That's what Rovio has been using the first year to identify"

"It's good to know that Sega isn't limiting us – everything is about the business opportunity," Rahkonen notes.

"Of course, there needs to be support from the respective studio in managing that IP or brand. Let's see how Rovio is going to support Sega, especially in growing their presence on mobile because that's one of the key goals for us, especially in the Western world. That means supporting Sega's existing games, but also focusing on new games that could become a success in the future."

That's not to say that Rovio has dropped its own franchises like Angry Birds. Rahkonen explains that broadening its IP onto PC and console was one of the main reasons for the acquisition.

"Together with Sega, we are planning the roadmap specifically for Angry Birds," he says. "As in, what would be the best way to develop and nurture the brand, and how could Sega help with this? What kind of content we could produce in the future such as movies and games. That's the big plan of what Rovio wants to do in this partnership."

Rovio also has several new free-to-play mobile games in development.

"That's still the core area Rovio is focusing on," Rahkonen adds. "That's where Rovio has the internal capabilities, and has been working successfully on for several years. [These projects] include Angry Birds and also new IP games with a more casual focus, because that's the kind of area where we have the best experience."

Currently, Rovio's main project is Sonic Rumble, which is set for release this winter. It just so happens to coincide with the box office debut of Sonic the Hedgehog 3, as well as the launch of Sonic X Shadow Generations this October.

This multiplatform, transmedia event is something that Rovio hopes to replicate with Angry Birds, following the announcement of the third movie in June.

"An exact release date hasn't been set for The Angry Birds Movie 3, but hopefully it can become a big transmedia event and programme where you have different types of game content for players and consumers to enjoy. We want it to be a 360-experience which is something that is very important to us as it helps to develop the brand, its longevity and storytelling."

Transmedia is one of many aspects Rovio is focusing on within its partnership with Sega, which Rahkonen emphasises that the two companies have "only just scratched the surface" of.

"You always try to focus on creating value quite quickly for shareholders during the first year, but also for players and consumers because of their expectations of when new games are coming," he says. "The thing is, if you want to create something new – it takes time. You need to build the foundation. That's what Rovio has been using the first year to identify, then on top of that the next five to ten year plan.

"But we have time. Gaming is still growing, there are so many players out there. This is the start of something where Rovio and Sega can create so many cool things for everyone."