Sony buys video game publisher two weeks after Microsoft acquires Activision

The major maneuvers continue in the world of video games, with the announcement, Monday, January 31, of the acquisition of the video game publisher Bungie, creator of the “Halo” franchise, by the Japanese Sony for 3.6 billion of dollars. Sony’s exit comes just two weeks after that of rival Microsoft, which put $68.7 billion on the table to take over another publisher, Activision Blizzard.

Ironically, in 2000, Microsoft had acquired the publisher, then about to launch its flagship game, “Halo”, of which more than 80 million copies have since been sold. In 2007, Bungie finally regained its independence but Microsoft retained the rights to the “Halo” franchise, the latest iteration of which, “Halo Infinite”, launched last December. In 2020, the market had swirled with rumors of a new approach from Microsoft, to the point that Bungie CEO Pete Parsons publicly denied the possibility of a second marriage.

The other big game developed by the publisher based in Bellevue (Washington State) is “Destiny”, a first-person and multiplayer shooter, launched in 2014. For this title, Bungie had concluded a distribution agreement with Activision, which ended in 2019 and was not renewed, the publisher then ensuring the marketing itself.

Acquisition at full price

“The price seems very steep to me,” responded Wedbush Securities analyst Michael Pachter, “but Sony has few games that monetize beyond the initial sale. real time.”

With the generalization of broadband and the arrival of 4G, then 5G, the model that shows the most growth in the industry is that of connected games, which offer multi-player spaces and even, more and more more, places of socialization. Additionally, several of the most talked-about franchises of recent years, such as Fortnite, generate significant revenue from in-game purchases by users.

“The price of these companies has become so high,” said David Cole, CEO of DFC Intelligence. “A lot of actors are trying to get their hands on the rights” to games. The acquisition announced Monday “is an important step in our strategy to reach a much wider audience with PlayStation,” Sony Interactive Entertainment CEO Jim Ryan said in the statement.

Already number one worldwide in video games by turnover, Sony oversees the development and marketing of the PlayStation console, which has sold more than 500 million copies of all models since 1994. Through the subsidiary SIE, Sony also controls a host of video game studios, which have developed titles for its console.

Other potential targets, starting with Ubisoft

In 2014, the Japanese group also launched an online video game service by subscription, called PlayStation Now, a market in which its major competitors, Microsoft and Nintendo, have positioned themselves, joined by Apple (Arcade) or Google (Stadia).

“Bungie doesn’t have a huge catalog,” commented Michael Pachter, “and isn’t really going to help Sony with its subscription service aspirations.”

Although the wind of consolidation has been blowing for a while now, several independent publishers continue to weigh on the market and could constitute as many targets in the future, from the American Take-Two to the Japanese Bandai.

“There aren’t many who can afford to buy companies like that,” warns David Cole. “And buying a video game developer is tricky,” in terms of integration, argues the analyst. “Google or Amazon don’t know how to do it yet.”

In terms of target, for the analyst, “Ubisoft is probably the best, because their valuation is not very high and they have a lot of good titles”.

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