What's going on?
Sony announced this week that it’s buying sci-fi game studio Bungie, as the entertainment giant tries to make a name for itself as the future of gaming.
What does this mean?
Sony has traditionally made a point of buying small games studios and building them out in its own image, but this slow-and-steady approach might not cut it any more – not after Microsoft announced last month that it’d be buying big-name developer Activision Blizzard. That acquisition will, after all, give its rival the power to make PlayStation-favorite Call of Duty an Xbox exclusive. So Sony has pulled the trigger on a major bid of its own, agreeing to buy US developer Bungie for $3.6 billion. That should provide the leverage it needs: the entertainment giant can now threaten Xbox users with going cold turkey on the must-have Destiny franchise.
Why should I care?
For markets: Spider-Man might save the day.
Investors sent Sony’s share price up 5% after the news, which partly makes up for the 13% drop it suffered when the Microsoft-Activision deal was announced. It’s still underperformed fellow Japanese gaming giant Nintendo by 19% this year, of course, but that’s arguably a bit short-sighted given that Sony has more strings to its bow. In fact, its image sensor segment is likely to have done big business last quarter after Apple’s bumper few months, and Spider-Man: No Way Home’s worldwide success should have bolstered its movie studio. Watch this space: Sony’s set to report last quarter’s results later this week.
The bigger picture: Start as you mean to go on.
There have now been three massive gaming acquisitions worth a total of around $84 billion in January alone. To put that into perspective, the whole of last year saw $85 billion in deals, which itself was almost three times higher than in 2020. So settle in for a record-blitzing year: analysts are expecting $150 billion in deals and fundraising in the sector.