Sega records $200m impairment loss for Rovio during Q3

Sega Sammy has released its financial results for the nine months ended December 31, 2025, noting significant declines in operating and ordinary income due to new game releases that failed to meet sales expectations.

The company also wrote down the value of Angry Birds developer Rovio, acquired in 2023 for $776 million, resulting in an impairment loss of almost $200 million.

Sega said Rovio “found it difficult to advance its initially planned business development” and consequently “the profitability of this business has fallen below the initial forecast.”

Here’s what you need to know:

The numbers

For the nine months ended December 31, 2025

• Net sales: ¥335.2 billion ($2.1 billion, up 4% year-on-year)
• Operating income: ¥19.8 billion ($129.2 million, down 54.6% year-on-year)
• Ordinary income: ¥23.8 billion ($155.3 million, down 51.8% year-on-year)

The highlights

Sega saw a considerable decline in its Entertainment Contents segment, with operating income dropping 31% to ¥23.7 billion ($154.8 million) and ordinary income falling 34% to ¥24.6 billion ($160.7 million).

Net sales remained stable at ¥242.2 billion ($1.58 billion), up from ¥238.6 billion ($1.55 billion) in the same period last year.

The company stated that new full game and free-to-play titles underperformed, while existing free-to-play titles “performed steadily.” Revenue from licensing, subscriptions, DLC, and animation “surpassed expectations.”

In the third quarter, Sega released two new titles: Football Manager 26 and Sonic Rumble. Sonic Rumble did not meet expectations, especially in customer acquisition.

Sega described Rovio’s Q3 performance as “sluggish,” stating it “fell significantly short of the initial forecast due to rapid changes in the market environment and other factors.”

The publisher noted that although Rovio has “strong development and operational capabilities” and was acquired to “accelerate Sega’s business expansion” in mobile gaming, the market “rapidly changed” in a short time.

Sega stated that increased competition and the emergence of major titles contributed to Rovio’s underperformance.

After review, Sega determined that “the recoverable amount related to Rovio significantly fell below its carrying amount,” resulting in an impairment loss of ¥30.4 billion ($198.6 million) in the third quarter.

In response, Sega will focus game development on “mainstay IPs,” promote its transmedia strategy, and strengthen its management system.

This includes appointing Daniel Svärd as Rovio’s COO, formerly head of live game studios at King.

Rovio aims to “leverage operational expertise cultivated through Candy Crush series and other titles to improve the performance of existing titles and lead project promotion toward the success of new titles.”

For its Entertainment Contents business, Sega plans to release four major new titles for its “mainstay IPs,” enhance “sales capabilities” to maximize each title’s potential, and continue expanding its transmedia business.

Looking ahead, Sega has updated its financial forecast from what was announced on May 12, 2025.

The publisher now expects net sales of ¥490 billion ($3.2 billion), up from ¥475 billion ($3.1 billion), and operating income of ¥40 billion ($261.5 million), down from ¥53 billion ($346.6 million).