Sega reports a $200 million impairment write-down for Rovio in the third quarter
Sega Sammy has disclosed its financial figures for the period ending December 31, 2025, highlighting a sharp decline in both operating and ordinary income. The drop is attributed to new games that did not achieve anticipated sales targets.
The company has also recognized a reduction in the valuation of Rovio, the Angry Birds creator it purchased in 2023 for $776 million, incurring an impairment loss close to $200 million.
Sega explained that Rovio struggled with its planned business goals, affecting profitability expectations negatively.
The financial details
Figures for the nine months ending December 31, 2025
- Net sales: ¥335.2 billion ($2.1 billion, a 4% rise compared to the previous year)
- Operating income: ¥19.8 billion ($129.2 million, a 54.6% decrease from last year)
- Ordinary income: ¥23.8 billion ($155.3 million, a 51.8% decrease from last year)
Key points
Within its Entertainment Contents division, Sega experienced a 31% reduction in operating income to ¥23.7 billion ($154.8 million), with ordinary income decreasing 34% to ¥24.6 billion ($160.7 million).
Net sales were stable at ¥242.2 billion ($1.58 billion), a slight increase from ¥238.6 billion ($1.55 billion) the previous year.
The company reported that several new titles underperformed, with existing free-to-play games maintaining steady performance. Licensing, subscriptions, downloadable content, and animation revenues exceeded forecasts.
During the third quarter, releases included Football Manager 26 and Sonic Rumble. The latter fell short, particularly in attracting new players.
Rovio's performance in the third quarter was described by Sega as lagging significantly behind predictions due to swift market changes and other factors.
Sega noted that despite Rovio's strong development capabilities, its integration was meant to enhance Sega's mobile gaming reach, but rapid market shifts posed challenges.
Heightened competition and major new titles contributed to Rovio's difficulties, leading Sega to record an impairment loss of ¥30.4 billion ($198.6 million).
In response, Sega plans to concentrate on key intellectual properties (IPs), enhance its transmedia approach, and bolster its management structure. This includes appointing Daniel Svärd, previously of King, as Rovio's COO.
Rovio intends to utilize strategies honed through Candy Crush and other projects to elevate its existing offerings and lead new project initiatives.
Sega's strategy involves launching four significant new titles, strengthening sales capabilities, and broadening its transmedia initiatives.
Looking forward, Sega has revised its financial outlook since its May 2025 announcement. The company now projects net sales of ¥490 billion ($3.2 billion) and operating income of ¥40 billion ($261.5 million), a downward adjustment from earlier estimates.