There’s no denying that January 2022 has already been a big month for game, and the year has hardly started. Gamers were given just enough room to breathe, following Microsoft’s acquisition of Activision Blizzard, when Sony announced it was acquiring Destiny 2 developer Bungie for a whopping $3.6 billion. This still pales in comparison to Microsoft’s deal for Activision Blizzard, but it’s still a pretty strong move on Sony’s part.
That said, there’s no real correlation between the two purchases. Some believe that the Bungie acquisition was done in response to the ABK deal, but since deals like these take months (if not years) to set up, that’s nowhere near accurate. That doesn’t mean Sony isn’t responding to changes in the industry, however, and games industry analyst Michael Pachter thinks it overpaid “out of desperation.”
Pachter is an analyst for WedBush Securities, often commenting on various details about the games industry. Of course, Pachter has also made a few bad calls like when he suggested The Elder Scrolls 6 would release in 2019. Nonetheless, in a discussion with Yahoo! Finance, Pachter says that the deal was essentially a “me too statement” from Sony, indicating it wouldn’t be left behind.
Pachter compares this Sony acquisition of Bungie to EA’s acquisition of Respawn a few years ago. As he describes it, EA bought Respawn for $700 million, which at the time employed 400 or so developers. Respawn, in this deal, also generated around $700 million a year in revenue. In contrast, Bungie does crudely $200 million. “So, I think Sony vastly overpaid,” says Pachter.
Pachter’s analysis, in this context, may make sense, but Sony probably wouldn’t have invested so much if it didn’t believe Bungie was worth it. Beyond revenue generated now, Bungie also has a lot on the horizon that this acquisition by Sony speeds up, as indicated in reveals around this acquisition. Sony is also intending to release more-live service games, and it’s likely that it leans on Bungie’s expertise in the area. Bungie games will also remain multiplatform, but if that’s enough to really justify the purchase price for Sony down the line remains to be seen.
Ultimately, Pachter concludes that this particular acquisition is “not really a deal that makes a whole lot of sense to me.” But, as with all video game developer acquisitions, it’s hard to see the long-term impact of such choices. What happens with Bungie and Activision Blizzard, and where these companies go in the next 5-10 years, remains in the air.
However, it’s also likely that even more deals as made, as some like Geoff Keighley has heard that several deals are currently in end-stage negotiations, while Sony itself has admitted it will acquire more companies in the future. As of now, it seems like a matter of when and, maybe more importantly, what companies.
Source: Yahoo! Finance