Rovio shuts down studio in Denmark after canceling game

Shutting down an entire division and laying off talented professionals when a project fails to meet expectations underscores the management's inability to grasp the mobile market, punishing the production team instead of reassessing the studio's planning errors. Rovio announced the permanent closure of its Copenhagen branch after deciding to cancel the development of the mobile game Sonic Blitz.

A spokesperson told Mobilegamer.biz that the layoff process is still ongoing, preventing the exact number of affected individuals from being confirmed, though about 20 developers were engaged in the project.

"The decision to cease our operations in Copenhagen was extremely difficult," the representative stated. "We acknowledge the impact this has on our team, especially in light of the ongoing challenges in the gaming sector."

For employees who cannot be relocated to other projects within Rovio, the company has promised a transition package with professional and wellness support to aid in career redirection.

The CEO of Rovio and COO of Sega West, Alexandre Pelletier-Normand, asserted that the company needs to focus its efforts on both the games produced and the locations of its studios.

The executive stated that the idea of merging the Sega hedgehog franchise with the developer's structure seemed promising for attracting the character's fan base.

However, during the early access tests that began in 2025 in Brazil and the Philippines, the game showed low player retention rates, failing to engage users for extended periods.

"I remain convinced that there is a path to reach more mobile players with Sonic, but it proved to be much more challenging than Sega and Rovio anticipated," Pelletier-Normand lamented. "We are proud of the team's work, but the game simply did not succeed."

The termination of Sonic Blitz occurred last month as part of a broader restructuring within the studio, with the company emphasizing that the cancellation does not reflect the development team's dedication or creativity.

Sega acquired Rovio for $776 million in 2023, but this year reported a $200 million write-down on the purchase value after profitability fell below initial projections.

The CEO of Sega, Haruki Satomi, mentioned challenges in integrating Rovio's Beacon technology with titles from its own division, citing differences in operational and marketing methods that prevented achieving the financial results anticipated before the acquisition.

Betting on partnerships between strong brands to expand the reach of well-known characters on mobile devices is a sound business strategy. However, canceling a project at the first retention hurdle and closing the Rovio headquarters in Copenhagen exhibits an excessive demand for immediate profits by Sega, sacrificing developers' jobs to cover executive misjudgments made during the company's acquisition.