Sony Group Corp. is acquiring Bungie Inc. for $3.6 billion to strengthen its game-making studios. Sony signed a deal with the U.S. video game company that developed the popular Halo and Destiny franchises.
This was Sony’s third acquisition in January; close on the heels of Microsoft’s purchase of Activision Blizzard Inc. for $69 billion and Zynga Inc., the snagging mobile leader from Take-Two Interactive Corp.
Buying Bungie will give Sony the admired first-person shooter games to compete with Microsoft Call of Duty Series, owned through Activision.
Sony’s shares were up by 2.6% on early trading Tuesday in Tokyo.
As per Bloomberg News, Microsoft’s next three Call of Duty series is expected to be released on Sony’s PlayStation but may decide to release it exclusively for Windows computers and Xbox consoles. Sony meanwhile clarified that Destiny 2 and other games wouldn’t be exclusive to PlayStation platforms.
The acquisition of Bungie by Sony Interactive Entertainment (SIE) will give access to a world-class approach and technology expertise, furthering its vision to reach billions of players. As per a statement by Sony, Bungie will continue to function as an independent entity.
Sony has regularly acquired lesser-known studios in the past decade and developed them with their marketing resources for Guerrilla Games and Naughty Dog. It also holds minority stakes in more prominent games companies like Epic Games Inc., which made games like Fortnite. Among the other small acquisitions was Finland’s Housemarque and the Burbank, California-based Insomniac games in 2019.
Microsoft has been focusing on its Xbox Game Pass subscription service, including big and small games. On the other hand, Sony’s strategy is to develop blockbusters and keep them exclusive for PlayStation. This strategy has helped them sell 116 plus million units on PlayStation 4, much more than Xbox.
According to Asymmetric Advisors, equity strategist Amir Anvarzadeh, the arms race in the game’s content and streaming seem to be hotting up. The gaming business model is looking to change dramatically, which Sony is unlikely to win given its limited resources compared to Microsoft.
Sony is expected to launch its own full streaming subscription service to counter Microsoft Game Pass, reportedly incurring a loss. This supports the view that the Sony PS5 era might be less profitable than its previous generation.
Bungie Inc. was incorporated in 1991. Its Xbox was its flagship product until Microsoft acquired it for $30 million. It mainly developed games for Mac and worked on a games project, Halo. Halo became the foundation of Xbox consoles and, so far, has generated more than $6 billion in sales.
Bungie went independent in 2007 after it spun out from Microsoft. It then worked on Destiny with Activision, and the relationship continued until 2019; Bungee began self-publishing and operated Destiny independently. Bungee is based in Bellevue, Washington, and has more than 900 employees.
Destiny is different from other franchisees, and it does not regularly release sequels but continues expanding its recent Destiny 2 game. The base game can be played for free while the expansions are routinely released, along with season passes. The move has drawn more than 20 million players since 2019, as per Bungie.
