What kind of wishful thinking is Tencent planning to bid for Angry Birds for US$3 billion?

Tencent is willing to support foreign game manufacturers because on the one hand, it needs to deploy in subdivided fields; on the other hand, Tencent intends to use capital to explore more gameplay and ideas to consolidate its dominant position.

On June 19, it was reported that Tencent was planning to acquire Rovio Entertainment, a Finnish game production company that had produced the hit PC game "Angry Birds", for US$3 billion (approximately RMB 20.4 billion).

Rovio was founded in 2003 and developed a number of award-winning mobile games; in 2009, Rovio released the well-known game "Angry Birds", which became global overnight.

But "Angry Birds" didn't lead Rovio on a path to real success. Since 2015, successive years of loss problems have led Rovio to choose to lay off large-scale employees, and former company CEO Peka Rantra also announced his resignation.

In April 2016, Rovio announced that the company had lost 13 million euros in 2015. Shortly thereafter, Peter Westbaca, the father of Angry Birds and Rovio brand ambassador, announced his resignation.

Although Rovio once pinned his hopes on the "Angry Birds" movie, this film also generated a strong global box office revenue of US$347 million for the company, including 500 million yuan in China box office. But it ultimately proved that this was just Rovio's last struggle.

There are signs that Rovio's glory era is coming to an end.

Sources said that in addition to selling themselves to be acquired, Rovio also sought an IPO, but this approach proved not feasible.

According to foreign media reports, Tencent is among the many companies participating in the bidding to acquire Rovio.

Why do you say that?

In 2016, Tencent just spent US$8.6 billion to buy an 84% stake in another Finnish game company, Supercell, the developer of Clash Royale. Therefore, in the eyes of analysts, with Tencent's current size, it is not willful to spend money to buy several game companies.

It's just that we are curious about, is Angry Birds still worth Tencent's money and busy work?

"Penguins eat birds". This is why Tencent

always talks about Rovio, but it always can't avoid talking about its masterpiece "Angry Birds".

Let's put it this way, as once-popular mobile games, Angry Birds and Fruit Ninja were touchstones for demonstrating the performance of smartphones."Look at my HTC Ox X. Can your Nokia play Angry Birds?"

But times have changed, and Rovio is not living well now. After years of declining revenue, widespread layoffs, the departure of key figures and the withdrawal of shareholders, Rovio is almost a "pill".

To be honest, if it weren't for the blood he earned from the "Angry Birds" movie last year, Rovio would have really been engraved on a tombstone.

Regarding the rumors of abandoning the IPO and choosing to embrace Tencent, Rovio said in an official statement: "We and shareholders often evaluate different options to promote Rovio's further development. In order to support the continued strong development of Rovio and its strategic goals, future listings are possible. However, Rovio and its owners have not made any decisions about a possible IPO."

The translation is almost like,"We haven't decided whether to sell or not. In the end, we mainly depend on how much money the sponsor is willing to pay."

Obviously, Rovio has not yet realized Tencent's true strength in the game business.

In addition to the US$8.6 billion acquisition of Supercell, let's take a look at Tencent's overall financial resources. The latest data for the first quarter of 2017 shows that Tencent Holdings 'total revenue was 49.552 billion yuan, a year-on-year increase of 55%; net profit reached 14.548 billion yuan, a year-on-year increase of 58%.

What kind of wishful thinking is Tencent planning to bid for Angry Birds for US$3 billion?

Among them, the operating income of mobile mobile games reached 12.9 billion yuan, a year-on-year increase of 57%. This means that mobile games have accounted for 26% of Tencent's total revenue.

In China's game industry, it can be said that Tencent humbly ranks second, but no one dares to claim first. In addition to being a well-deserved game overlord in the domestic market, Tencent is one of the best giants in the global game field, and China game players have also been cultivated to become the world's largest game consumer group.

Earlier this month, a global game research report released by British venture capital firm Atomico showed that the market value of the global game industry reached US$101.1 billion last year, of which China players contributed US$24.6 billion in game revenue, higher than the US game market. With US$24.1 billion, it has successfully become the world's largest game market.

Faced with the olive branch thrown by Tencent, if Rovio is not moved, it is definitely not true.

Angry penguins?

Any capital acquisition is destined to be a win-win situation.

From Tencent's perspective, acquiring Rovio means getting the super IP of Angry Birds, which is in line with Tencent's current layout in the mobile game market.

At present, the "Angry Birds" series of games have launched "Angry Birds 2","Angry Birds: Blast" and "Angry Birds: Friends", and the performance of these game products is still eye-catching.

At the recent WWDC conference,"Monument Valley 2" stole Apple's limelight, and Tencent's agent for this game also became a fuss for a while. Although Tencent has announced in a high-profile manner that it will launch the "Aurora Plan" to support innovative games at home and abroad, it is already sitting on the "Glory of the King", which is making money every day. I wonder whether niche stand-alone games will be any good for Tencent. After all, they are likely to be as thankless as Clash Royale.

Tencent has always adopted a free-spirited attitude towards investing in these foreign games. Whether it is "Monument Valley 2" or Clash Royale, Tencent is currently only opening the interface to reveal logos and providing Tencent's login number. It can be said that it will stop immediately and will not cause too much resentment from players.

Of course, some people pointed out,"Maybe Tencent intends to revive the former stand-alone game market." The end of the PC game era and the gradual rise of the mobile game industry have determined that Tencent must invest more energy in mobile games and carry out a larger layout. Tencent has won most of the major online games before, mainly focusing on interaction between players. Tencent has not made much progress in stand-alone end-games and mobile games.

In our opinion, Tencent is willing to support some foreign game manufacturers. On the one hand, Tencent is concerned that the game market is moving towards segmentation and needs to deploy in segmented areas; on the other hand, Tencent has gained an absolute advantage., began to deliberately use capital to explore more gameplay and ideas to consolidate its dominant position in the game industry.

From this point of view, if it can win Rovio for US$3 billion, Tencent's deal will not be a loss. Coupled with its advantages in video, animation and other fields, it will also give the big IP of "Angry Birds" more possibilities in the future.

Finally, the ultimate question comes, is this game still played?

Editor: jessica