Nexon Revenue Rises 6.5% to $3.1bn in 2025, Driven by Ongoing Success of Arc Raiders

Why It Matters

The impairment highlights the volatility of mobile‑gaming acquisitions, while Sega’s strategic pivot aims to safeguard margins and restore investor confidence in a competitive market.

Key Takeaways

• Sega writes down Rovio by ¥30.4 bn
• Operating income down 55% YoY
• Net sales rise 4% to ¥335.2 bn
• New titles underperform; focus shifts to core IPs
• Operating profit forecast cut to ¥40 bn

Pulse Analysis

Sega Sammy’s latest financial release underscores the challenges facing legacy publishers in the mobile‑gaming arena. While overall revenue grew modestly, the steep drop in operating income reflects both under‑performing new titles and the costly write‑down of Rovio, an acquisition intended to accelerate Sega’s mobile footprint. The ¥30.4 billion impairment signals that the market’s rapid evolution can quickly erode the projected value of even well‑known IPs, prompting investors to scrutinize integration risks more closely.

The mobile sector’s competitive intensity has intensified, with dominant players like King and emerging titles reshaping user acquisition costs. Rovio’s recent performance, described as "sluggish," illustrates how shifting consumer preferences and aggressive competition can undermine forecasts. Sega’s decision to appoint Daniel Svärd, a veteran of King’s live‑game studios, as Rovio’s COO reflects a tactical move to inject proven monetisation expertise and stabilize the portfolio. This leadership change aims to leverage successful live‑ops frameworks, potentially revitalising under‑performing titles and improving cash flow.

Looking ahead, Sega is betting on its "mainstay IPs" and a transmedia approach to drive growth. By committing to four major releases and enhancing sales capabilities, the company hopes to capitalize on established brand equity while diversifying revenue streams through licensing, subscriptions, and DLC. The updated FY guidance—¥490 billion in sales and ¥40 billion in operating profit—signals a more conservative outlook but also a clear intent to prioritize profitability over aggressive expansion. Stakeholders will watch closely how these strategic adjustments translate into market share and earnings stability in the coming quarters.

Nexon revenue rises 6.5% to $3.1bn in 2025, driven by ongoing success of Arc Raiders

Rovio “found it difficult to advance its initially planned business development, ” says Sega

Image credit: Rovio/Sega

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.”

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The numbers

For the nine months ended December 31, 2025

• Net sales: ¥335.2 billion ($2.1 billion, up 4 % YoY)

• Operating income: ¥19.8 billion ($129.2 million, down 54.6 % YoY)

• Ordinary income: ¥23.8 billion ($155.3 million, down 51.8 % YoY)

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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.

• 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 Q3, 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.”

• 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.

• Increased competition and the emergence of major titles contributed to Rovio’s under‑performance.

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.

Sega Sammy

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 the 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.

• 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: ¥490 billion ($3.2 billion), up from ¥475 billion ($3.1 billion).

• Operating income: ¥40 billion ($261.5 million), down from ¥53 billion ($346.6 million).