The mobile game Angry Birds, developed by the Finnish firm Rovio, has been downloaded more than 100 million times across Apple’s (NASDAQ:AAPL) iPhone, iPad, iPod Touch, and a number of other platforms. The free Google (NASDAQ:GOOG) Android version of the game generates around $1 million a month in advertising revenue alone. A Facebook version of the game was announced in December alongside a sequel due out by the end of 2011.
Any investor with a finger on the mobile entertainment industry wants in on Rovio as soon as possible, and the company has promised an IPO in the “next few years.”
But it’s a long way from here to there. The Angry Birds phenomenon is still young and Rovio has yet to prove that it has more than one major success in them. There are also a number of larger companies who may make Rovio an offer it can’t refuse before that IPO becomes reality.
Here are five companies that are strong candidates to make a bid.
Electronic Arts (NASDAQ:ERTS)
EA is already a leader in the mobile game space and it’s aggressively growing its business. The company has actually already rubbed up against Rovio. It acquired Chillingo, which publishes both Angry Birds and other Apple-platform hits like Cut the Rope, for $20 million in October. As EA comes to rely more on revenue from mobile and social gaming, a proven brand maker like Rovio could help cement its place in the market.
Disney (NYSE:DIS)
Disney also is making high-profile acquisitions in the mobile game space. The company picked up Finnish startup Rocket Pack earlier this month. Disney has a well-known lust for acquiring popular intellectual property, and acquiring the maker of a familiar game like Angry Birds would be well in line with past purchases like tSocial City maker Playdom and website Club Penguin.
Microsoft (NASDAQ: MSFT)
Microsoft’s home video-game business is thriving thanks to its Kinect hands-free motion-control device, but the company badly needs a feather in its mobile cap. Windows Phone 7 has had a shaky start, and the company’s partnership with Nokia (NYSE:NOK) isn’t necessarily a guaranteed booster. Picking up Rovio would make for a bold statement in the mobile industry, securing a recognized icon for its platform that it could then make exclusive. It would be risky — Angry Birds‘ success came from the popularity of the iPhone, not vice versa. Still, it could help give Windows Phone 7 the kick start as an entertainment device it needs.
Apple
Up to now, Apple has staunchly acted as gatekeeper rather than producer when it comes to gaming on its platforms. After all, why spend the money on game development when others can do the work and you still get 30% of every sale through your store? However, Apple has been boosting its device profiles as gaming machines with the iPhone 4, iPad 2, and Mac App Store. A purchase of the most famous iPhone game yet would give it the benefit of exclusivity, as well as make for a promising beginning for Apple’s in-house game development.
Amazon.com (NASDAQ:AMZN)
Rovio recently announced an Angry Birds tie-in with News Corp.’s (NYSE:NWS) 20th Century Fox movie Rio that would be available on Android phones — but only through Amazon’s app store. This is a coup for Amazon’s fledgling storefront as well as a possible signal for future partnerships. While Amazon has traditionally acquired distributors rather than content producers, the company’s digital business is still amorphous. Amazon will obviously strive to get its app market on platforms other than Android, and exclusive content from an in-house developer like Rovio could help it find that success.
As of this writing, Anthony John Agnello did not own a position in any of the stocks named here. Follow him on Twitter at @ajohnagnello and become a fan of InvestorPlace on Facebook.
