Markets and press are not responding well to the Microsoft acquisition of Activision Blizzard.
Link: https://www.reuters.com/markets/asia/sony-brings-knife-global-video-games-gunfight-2022-01-19/
Sony (6758.T) has just been dragged into a fight where it's heavily outgunned. Investors on Wednesday erased up to 10% of its market value after Microsoft's (MSFT.O) $68.7 billion swoop read more on video-games developer Activision Blizzard (ATVI.O). The Japanese group may lose access to some content but that looks manageable for now. The bigger worry is that Sony is no match against its far-larger rival as gamers look beyond consoles.
Microsoft's purchase, the largest in the industry, is likely to kick off a war for content. The deal will give the Xbox console maker a stable of popular titles from mobile hit "Candy Crush" to the lucrative "Call of Duty" shooter franchise. Already, larger studios are circling smaller peers: Earlier this month, Take-Two Interactive (TTWO.O) snapped up Zynga in a $12.7 billion deal. Titans like Meta (FB.O), Alphabet (GOOGL.O) and Netflix also have ambitions in the sector.
That puts Sony, whose roughly $140 billion market value pales in comparison to its U.S. rival, in a difficult position. The company's low-key strategy of acquiring relatively niche and small studios has helped propel its PlayStation console ahead of the Xbox. But the latter may now gain an edge. Activision's "Call of Duty: Vanguard", for instance, was the second most downloaded title for the PlayStation 5 in North America and Europe last year; analysts at Macquarie reckon the franchise accounts for a "major" portion of Sony's in-game transaction sales. While it's unlikely that Activision's new owner would cut off access, Microsoft will be looking to gradually lure PlayStation gamers to its own console with new content down the line.
Link: https://www.reuters.com/markets/asia/sony-brings-knife-global-video-games-gunfight-2022-01-19/