Good morning. Let me mute myself. All right, perfect. Here. My name is Lotta Backlund. I'm Head of Communications at Rovio. Very welcome. I'll be moderating this event today. I hope you all found coffee and breakfast at the back of the room. It'll be served the entire event through. We have media present here at Epicenter in Helsinki. We also have some people joining online on Zoom. We have some media outlets joining us from Japan, from the U.K., and the U.S. For those of you joining live, you've been handed folders which contain the original stock exchange release from 2 weeks ago announcing the recommended cash offer. There's also a photographer who is here at the venue who's going to be taking some pictures. Those pictures will be made available for everyone in a few hours.
There will not be possibilities for one-on-one interviews today, but we will open up for questions and answers after the initial presentations. For those of you in Helsinki, just put up your hand in order to indicate that you have a question and I will call on you. If you guys are online, make sure to use the questions and answers box on the Zoom call, and we will then pick you and unmute you so you'll be able to ask your questions live. We're not gonna use the camera, so if you haven't brushed your hair, that's okay. Some expectation management. Due to time constraints, the topic of the event today is the deal between Rovio and Sega, and we will limit ourselves to questions about that.
However, I do want to note that since we are currently in the takeover bid period, neither representatives of Rovio nor Sega can answer about concrete plans or details regarding future integration or questions related to that. The agenda is as follows: we will first hear an introduction to Sega Sammy by Haruki Satomi, who is President and CEO for Sega Sammy and CEO of Sega. That will be followed by an introduction of Sega Games by Shuji Utsumi, who is Co-COO and President of Consumer Game and Transmedia for Sega. We're then going to hear commentary from Rovio, both from Chairman of the Board Kim Ignatius and CEO Alexandre Pelletier-Normand. After that, we're going to open up for questions. We are having an interpreter joining us today, so he will be translating questions from English to Japanese to English where needed. All right. Everyone ready? Let's get started.
Please welcome to the stage President and CEO for Sega Sammy and CEO for Sega, Haruki Satomi.
Hey everyone. Bye bye. It is my pleasure to be here in Helsinki today and to host this press event. First of all, allow me to introduce the Sega Sammy Group. First, Sega, a provider of entertainment content and services such as video games, arcade machines, animation and toys. Second, Sammy, which sells pachinko and slots machines in Japan. Third, we have various resort businesses that operate large scale hotels and golf resorts in Japan and Korea. The group as a whole has sales of approximately $3 billion. Let me talk a little bit more about Sega. Since 1960, we have delivered many games to the world. In recent years, the movie Sonic the Hedgehog, co-produced with Paramount Pictures, has been a huge hit in revitalizing the intellectual property and successfully expanding on its mixed media.
We have other popular games too, such as Persona, Like a Dragon, Phantasy Star Online 2, Total War, Football Managers, and among others. Another strength of Sega is that we have games of variety of platforms, including consoles, PCs, smart devices and arcade machines. We have been cultivating those IPs over the long history. You might remember that the history of smartphone gaming had started by Apple App Store in 2008. Now it has expanded to a market size of over 50% of the whole game industry. When Sega released Super Monkey Ball as a launch partner, I was actually involved in the smartphone game business as Vice President of Sega of America at that time in San Francisco. Soon after, Rovio released Angry Birds and became much more popular than Super Monkey Ball. I was so sad.
I still remember that scene of everyone playing Angry Birds in America. That's why we are so excited for the possibility to have Rovio to join the Sega family and explore our business together. From a strategic point of view, this is a great opportunity for Sega to expand its business in the global market. Our objective is to learn and strength from Rovio's high level of development and management capabilities. For Sega, we believe by reaching out to the global market, we will be able to achieve another level of significant growth. For Rovio, you will have the opportunity to have expanding into areas other than the mobile games based on Sega's development and publishing capability for a variety of platforms, as I mentioned. We believe that sharing and collaboration of both companies' IP would further grow the mutual fan bases of both companies.
Before I finish, let me share you a short story. Last year, I visited Helsinki and had a conversation with Kim Ignatius, the Chairman of the Board, and Alex Pelletier-Normand, the CEO. I had a chance to see the city. I also had dinner with Alexandre Pelletier-Normand. I even went to a sauna together. Wow! The sauna in Helsinki was amazing. I love it. Actually, I went there yesterday again. It's actually very popular in Japan as well. In Japanese, there's a word, omotenashi, which means hospitality, to treat guests with respect and care. Sega respects Rovio with its spirit of omotenashi. It would like to face the same vector to deliver experiences to captivate the people around the world. I look forward to seeing the prosperous future of both companies. Thank you very much.
Thank you so much, Satomi-san. All right, we're going to next hear an introduction of SEGA Corporation. Please welcome Shuji Utsumi, who is Co-COO of President of Consumer Game and Transmedia for Sega. Welcome.
Thank you. My presentation over in Finnish. I'm Co-CEO of Sega and in charge of game business and transmedia. Satomi-san touched on overall Sega Sammy perspective and the relationship with Rovio. I'd like to introduce more on Sega game-related business. Sega game business started from arcade, we are still a major arcade player in Japan. Recently, crane game market exploded like this, Sega is the leader in this category. Consumer games covering console, PC games, mobile, represents major part of Sega business. I will discuss more in later in my presentation. Sega also has animation studios and also a toy company. Animation company has been doing pretty good job and actually having a Japanese animation series for a long time, popular one, namely Anpanman and Detective Conan and so on. Next page, please.
As Haruki-san mentioned, Sega has many IPs. We identify some key IPs as franchise and deliver new title regularly. Sonic franchise has been growing again recently, the IP has become back as the face of Sega. I will touch on Sega, I mean, Sonic business more later. Like a Dragon franchise, also known as Yakuza series, has been growing its popularity just from Japan to global market. PSO2, this new genesis here, is a console and PC online franchise. Finally, Persona is another growing franchise developed by Atlus, which Sega merged 2006. We keep Atlus brand now, the company is a major contributor of Sega's profit. Next page. We also have several franchises from Europe. All these franchise came from M&A. Total War, and Warhammer series from Creative Assembly.
Two Point series from Two Point Studios. Company of Heroes from Relic Entertainment. Football Manager from Sports Interactive. HUMANKIND from Amplitude and so on. Next one. We have many business bases all over the world. Sega and Atlus including studios are located in Tokyo. In Japan, we have 3,900 crews. U.S. headquarters in Los Angeles, and also Relic Entertainment is located in Vancouver in Canada. North America, we have 600 people. Asia, we have many marketing sales entities like Seoul, like in Taipei and Shanghai and Singapore. Europe, we have second-largest manpower resources for Sega. We have roughly 1,800 people ready. We have several studios in London, Amplitude in Paris, Creative Assembly Sofia in Sofia. Altogether, we have roughly 6,500 crews all over the world. Next one, please.
I'd like to also share our business challenge as Alex mentioned. Left chart shows Sega's game sales split among platforms. When you see mobile games here, 38% of our game business is from mobile business. On the right side, majority, namely 88% of the business comes from Japanese market and only 12% is from overseas. On the contrary, on the left side, PC and console combined, you want to see this right on the bottom. 80% of the PC and console business comes from outside of Japan last year. Especially Japan-based franchise, including Sonic, has been growing remarkably. Next one, please. This is a familiar chart. I mean, this is a global video game market chart. As you know, mobile gaming represent more than 50% of the business, game business, and it grows fastest among all the sectors.
It has been our challenges to reach out global mobile market utilizing our own IPs and franchises. Next page, please. I'd like to share recent activities of Sonic. We are fortunate to have Sonic movie hits 2 in a row, and up until a few weeks ago, we had a box office record using gaming IP. Someone broke a record with a Red color. Talking about animation, we have a Netflix animation called Sonic Prime debuted last year, which was ranked top 3 in dozens of countries in family sector. Sonic also appears in Roblox, number 1 IP-based games among all Roblox games. Also we have a lots of merchandise partners like clothes, like shoes, and also recently we made an announcement with LEGO for another initiative. Of course, we have been active in game business too.
Sega introduce new Sonic title every year, but last year we introduced Sonic Frontiers. We released last year. It was a great hit already, you know, hitting 3.5 million units. Next page, please. I believe the recent success of Mario movie should accelerate transmedia trend of game IPs. Sega has lots of IPs which are not included in the franchise I mentioned before, like below charts below, and I hope you like some of the IPs here. I joined Sega three years ago, and I feel like Sega is like a treasure island with great IPs and great talents. Sega has also solid business base of console and PC game globally. Through our conversation with Rovio, we see similar culture and value, and we also see Rovio has a strength we do not have.
We believe Sega and Rovio has characteristics to complement each other for the future growth. With Rovio, I believe Sega can accelerate transmedia initiative more aggressively. Next page, please. TOB process is not yet started, so I cannot allow to show too much of the information, but I try to share Sega's profile and the respect towards Rovio. Thank you for listening and kiitos.
All right, next we're going to hear from Rovio. Please welcome Kim Ignatius, who is chairman of the board for Rovio.
Good morning, everybody. My name is Kim Ignatius, and I'm the chair of the board of Rovio, and I'm very happy to be here on the stage today with our friends from Sega. I would like to start with a few words about how we came to this day actually. In the beginning of the year, Rovio received indicative interest from some external parties looking for perhaps acquiring the company. The Rovio board decided to start a strategic review on what possible avenues therefore were for the company in the future. In this strategic review, we thoroughly analyzed and addressed all the options. We considered all options, of course, from the perspective of the shareholders, but also from the perspective of Rovio itself and the Rovians.
The options included possible transactions, but also naturally continuing as a standalone company by executing Rovio's announced strong strategy that we believe in firmly. As part of the review, we had discussions with several interested parties about the potential combination. My personal reflection is that throughout the process, when meeting with the people from Sega, I always felt that there was a strong potential in this combination. As you know now, the review was completed, and on April 17th, Sega's public tender offer was announced. The conversations with Sega were fruitful and constructive from the very beginning. Between February and April, an extensive due diligence was completed by Sega, as is typical in these type of potential transactions. Several meetings were held where we got to know each other and possible synergies were explored.
During this process, it became quite evident that Sega and Rovio would make a very strong fit. There are synergies to be had in several areas. Alex will soon, in his presentation, talk about these synergies in more detail. Overall, combining the strengths of these two companies presents an incredibly exciting future. The board of directors of Rovio is recommending this deal, not only because of the reasons I just mentioned in terms of synergies that these two great companies can have, but because this is also a financially solid deal. The share offer price represents a premium of approximately 63% compared to the undisturbed share price. The board of Rovio sees that Sega, as one of the most prestigious and historical gaming companies, would be a good home for all the talented Rovians and the iconic games of Rovio.
Once again, very happy to be here today. Thank you.
Thank you, Kim. Finally, please welcome Alex Pelletier-Normand, CEO of Rovio.
Good morning. Good morning, everyone. First of all, thank you very much, Satomi-san and Utsumi-san, for your presentation. It's been insightful. Today, I would like to share with you some thoughts on what this transaction could mean from more of the angle of Rovians for Red the Angry Birds and for our overall global strategy. To begin with, I will talk about my fellow Rovians, so the passionate and dedicated employees of Rovio. Over the past few months, I had the opportunity to sit down with the Sega team, with a limited group of managers, and to discuss several things together, and I was able to understand a little bit more how they saw the market and what was their strategy going forward. There's two things that became apparent very quickly, and one of them is that our strengths were remarkably complementary.
The second one is that there was a mutual respect for what both companies have accomplished throughout the years, which created a strong connection. Myself and this group of manager left the meeting impressed, but we were also eager to see what other Rovians would think about it. Leading to the April 17th announcements, Rovio's leadership team and I carefully planned the announcement day and how we would share the news with Rovians. The announcement day was actually literally planned minute by minute. The all-hands meeting that we had on the Monday was perhaps not a surprise to anyone due to the media attention we got in the previous weekend, but we had everybody's full focus when we presented the project carefully, in depth, and addressed all questions.
Judging by the smiles across the room and all the positive atmosphere that we felt, it was clear that Rovians were excited at the idea of partnering, with a company that many of them had admired since childhood playing Sonic the Hedgehog on their Sega Genesis platform. Sega has a long history of developing and nurturing IPs, and this respect for craftsmanship is paramount to Rovians when thinking about a new home, given the pride and attachment we all have towards Angry Birds. The reason why this project is exciting to us is that it simply makes sense. Rovio and Sega share a deep respect of IPs. Our strengths complement each other's perfectly. Sega is a household name on PC and console, which means that they can help us bring Angry Birds to new audiences on those platforms.
On the Rovio side, we have spent the last 20 years developing and operating mobile games. We're excited at the idea of helping Sega expand their IPs and reach an even more people on the global mobile gaming market. Both Rovio and Sega have also succeeded in bringing their beloved characters outside gaming onto other forms of entertainment, such as feature films and series. We certainly have a lot in common to share about this. In conclusion, I want to express my heartfelt gratitude to all Rovians who have contributed to Rovio's success over the years. I am personally convinced that Sega, as an owner, would deeply respect and honor this legacy. Thank you.
Thank you, Alex. Please don't leave. We could ask Satomi-san and Utsumi-san and Kim to join us on stage. I will remind you if you're on the Zoom call, if you're joining online, please put your questions in the Q&A box. You can find it at the bottom of your screen. We will pull them from there and unmute you so you can ask your own questions. There is somebody in the room who wants to ask a question, just put up your hand. Right. Okay. We have a microphone running to the gentleman in the back.
Yes.
Okay. My name is Juha-Matti Mäntylä. I'm from Yle, Finland. Sega has done acquisitions previously, I know that you are not at least you said so, you're not going to tell specifics of this integration that is coming in the next... in the future. What is your strategy overall with the gaming studios that you have bought previously, and is that something that we can expect?
As we mentioned, we cannot talk specifically about Rovio. Of course, we can talk about the past, what we have done. Over the last 15 years, I think we have acquired.
Six
... nearly 10 or a little less than 10 studios worldwide. All of the studio have grown since then, especially like Creative Assembly. When I visited the office the first time, their office is in, it's just a small house, about 60 people. Now expanded to 800?
800 people, isn't it, Harada?
One of the biggest studios in U.K. now. In Japan, Atlus, they've joined us Sega family, and merely size become double now. All of the studio, we respect the independence and their brands. For console and PC, we publish as Sega brand most of the title. Like Atlus, they were the publishers of console before that, so we respect their brand, so we treat it as a publishers as well, not only just as a studio.
For example, Atlus, I mean, they just focus on the console only. Now they have a PC, you know, initiative also, and now expanding into mobile also too. We're helping them to grow, utilizing their strengths. Thanks.
All right. Thank you very much. Do we have more questions in the room? Elena.
Hello.
Thank you. You told that you visited Finland first time last year. How did the discussion started already before Playtika's offer?
How did you become interested, and who started the discussions?
Actually, After we agreed the deal, I looked through the email chains and what was the first contact we had. It's about, almost a year ago in June last year. Initially, I thought it's online?
No.
Shuji and Alex had a online meeting, I believe.
Afterwards, during the Tokyo Game Show or something, like Alex visited in Japan, and we had a conversation. It's not about the acquisitions and those-
Right
simply there's more business opportunity, what we can do together. That was the original discussion we had in last year.
As we showed in the in our presentation.
It's been a challenge always to reach the global mobile market. You know, we happen to discuss on the matter. Of course, we don't have to talk about the past story, right? You know.
All right.
Yeah.
Thank you. More questions on the floor? Elena again.
I know you can't talk so detailed about future, but obviously there is a option that Rovio could develop Sega Sonic mobile games. How do you see their Beacon platform, for example, in that sense?
Yeah, yeah. Of course we can't talk about the future titles. About Beacon, that's what I impressed a lot. The about 100 people in last, like decade have been developing this system and operate and help the publishing and marketing the Rovio's title. That what Sega is missing for. We have done it by ourself a little bit, but at a global scale, Rovio has done it. By adding the Beacon system to Sega's existing title, that itself can be of valuable for us.
Alex, I wonder if you would like to use a few words because maybe not everybody knows what Beacon is. Just shortly explain what it is.
Right.
Yeah. Thank you. It's a very good question. Beacon is all of our tools that we use and all of our central services that serve all of Rovio's company, and really helps us, you know, develop those games and scale those games, which means that every team that starts work on a project, you know, they can really focus on the core game and, you know, Beacon basically handles the rest. We have, you know, those tools and those people that can really support our creation teams.
Thank you. All right. More questions? No. Oh, we have Aleksi.
So-
Wait, wait for the microphone so the people on the stream can hear you.
Yeah.
Thank you.
Hello. I'm Aleksi Ylä-Anttila from Kauppalehti. I would like to ask to Alex as, how do you see the future of Rovio now as a part of the Sega family? Which will be the key elements that comes to your mind now?
Without entering into, you know, concrete details because we can't do that at this point. Of course, you know, for us being part of a bigger family and having the possibility for the synergies that were already communicated and identified, which means that, you know, bringing Angry Birds outside on the, you know, mobile, on PC and console. Also, it's very interesting to think about the opposite as well, right? Sega throughout the years have developed a very good number of interesting IPs that are very rich and deep. You know, the mobile gaming market today is very competitive. It's been a big advantage for us to have the Angry Birds brand and be able to, you know, make games with the Angry Birds brand, which is a brand that is recognized worldwide.
When people, you know, go to the App Store and think about, you know, which is the next game that they're gonna develop, it's, you know, that they're gonna download, it's very reassuring to see a brand like Angry Birds, and it helps us, you know, acquire user this way. We've developed an expertise throughout the years of nurturing this brand and having it help us, when it comes to user acquisition. If only we think about this, but also about the other brands that Sega has developed throughout the years, you know, it's exciting for us to think about, you know, what else can we do on top of what we do with Angry Birds with other brands as well. That's a big, big point for us.
All right. Elena.
Hi again. I see Sega as a family company with your history with your father who is a founder. Do you see a culture fit there with the head family? How have you met the head family? Do you see there some common culture fit? Also, how are your working cultures align? There can be differences in Nordic and Japanese business culture.
Yeah. Surprisingly, I see the lot of similarity between Japanese and Finnish company and as well as the Sega and Sega Sammy group and Rovio. As you mentioned, we are the family-owned business company, as Rovio has done it. The respect of employees as like a family members is quite similar treatment, like cultures we have. That's what we also surprise for me that there are a lot of similarity between two companies.
Thank you. All right. Do we have questions in the room? Online, I would like to remind you that you have to put your question in the Q&A box, unless you don't, I can't see it. Thank you. All right. If there are no more questions on the floor. Great. Okay, we're gonna do some pictures, so we're gonna take down the table so you can get better pictures. There's gonna be some picture opportunities for all cameras afterwards as well. Thank you for now. It's been wonderful that so many of you turned up, so thank you very much.
Thanks again.
Thank you.
Thank you.