Rovio staff are not feeling good about potential new owner Playtika.
Sources within the company plus others close to the Angry Birds maker told us that the internal reaction to Playtika’s offer was bad. Responses have ranged from “oh no” to “slanderous” remarks about Playtika’s practices. “Overall the pulse on this is negative,” one person said.
The staff that had moved from Seriously to Rovio after Playtika closed the Best Fiends studio “lost their minds” as the news came through, our source said.
Rovio management assured staff that any potential agreement could take some time, and stressed that it was still possible that no sale would be agreed, we were told.
The feeling internally is that Rovio won’t sell to Playtika, but while discussions with Playtika and other suitors drag on, productivity will suffer.
Our source added that Playtika’s public bid was generally “frowned upon” by Rovio staffers, and that overall views of Playtika were mostly negative, with culture clash – the same thing Seriously ran into – among the main concerns.
Another source in Finland working under Playtika’s management described their experience to us as “horrible”, citing chaotic workflows, poor communication, a separation between “them” in Israel and “us” in Helsinki and poor work-life balance overall.
Other sources close to Rovio noted concern around Playtika’s track record for ruthlessly closing studios and moving game production to Israel.
If successful in its takeover, Playtika could “close everything apart from Stockholm,” one source suggested. Rovio Stockholm is home to Angry Birds 2, and is considered ‘safe’ alongside the HQ in Espoo, Finland. But newer outposts like Montreal and Barcelona could be part of a brutal clear-out if a Playtika deal gets done, they said.
While it’s easy to characterise Playtika as the big bad wolf here, Rovio’s lack of recent growth and its vague plans for the future were also called into question by our sources.
Some said Rovio needed “a kick up the arse” and that it has been “treading water” for years. Others, however, praised CEO Alexandre Pelletier-Normand for his bold investment in new projects, like its forthcoming move into PC and console.
“The growth investments and projections for the next 4-5 years seem overly optimistic, considering the trajectory of the past years,” one source said. “The company has invested in acquiring and opening new studios, but these investments have yielded very little in terms of new games, and zero growth thus far. The exception may be Ruby Games but even that may fall short of expectations.”
Our source saw little growth in Rovio’s casual free-to-play portfolio in the near term, and they described Rovio’s expansion onto PC and console – known as Rovio’s ‘future of gaming’ initiative – as “an incredibly risky bet”.
“They have not been particularly strong on the M&A front despite having a reasonable war chest for this, which makes growth via this route quite risky as well,” our source continued. “It would be quite a reasonable outcome if one of the other bigger players were to acquire Rovio, and make full utilisation of the powerhouse Angry Birds brand.”
This deal has a long way to go. As noted by Joost van Dreunen, Finnish takeover law requires acquirers to reach a 90% threshold of shareholders to close a deal.
The 33% of Rovio held by individual retail shareholders could prove to be the sticking point, especially as some of those shares are owned by Rovio’s founders and original staff, who are less inclined to sell up simply for the cash.
One source suggested Netflix would be a great buyer for Rovio, given the streaming firm’s deep pockets, ambitious mobile plans and the Angry Birds brand’s pre-existing cross-media appeal.
Netflix has already set up shop in Finland through its acquisition of Next Games and its new Helsinki studio led by Zynga and EA veteran Marko Lastikka. Netflix has also previously described Helsinki as “home to some of the best game talent in the world”.
Other names linked to a Rovio buyout in the Finnish press recently include EA, Take-Two, Sony and Disney.
Industry legend has it that Disney and Rovio were once close to completing a deal back when Angry Birds was at its peak, but it never materialised. Rovio remains a good brand fit for Disney, which is currently building a ‘next generation storytelling’ team to create games and other interactive projects. That team includes former Apple Arcade creative director Mark Bozon.
Rovio and Sony already have a relationship through the Angry Birds movies, which were co-created by Sony-owned Columbia Pictures and distributed by Sony Pictures. Sony’s PlayStation division has been building a mobile game team in the last year, but appears to be focused on the more hardcore end of the market.
Two weeks after Playtika made its public, unsolicited buyout bid, the Angry Birds maker said it is now in talks with Playtika and other parties to assess its options. But Rovio was also clear that the discussions may not necessarily result in a sale or merger.