The trend of the gaming industry is consolidation. A few weeks ago, Take-Two Interactive announced the acquisition of Zynga for $12.7 billion. Take-Two, the company behind Grand Theft Auto, Red Dead Redemption and many other popular series, has now added a mobile game giant. In 2021, Sony bought up to 6 game studios, and Microsoft announced the acquisition of ZeniMax for more than 8 billion USD.

However, there is no deal more shocking than Microsoft's recent acquisition of Activision Blizzard. According to an announcement from the $2 trillion company, they agreed to pay more than $68 billion to acquire the publisher behind Call of Duty. As soon as the news that shook the whole industry was released, Sony stock immediately "plunged" into an unprecedented plunge. Causing the company to lose more than 20 billion USD in market capitalization.

Why did Sony stock plummet when Microsoft bought Activision Blizzard?


Separate gamers from favorite games

Two consecutive acquisitions of Activision Blizzard and ZeniMax made a series of popular games fall into the hands of a single company. Call of Duty, Elder Scrolls, Fallout, Overwatch, World of Warcraft, Diablo, Starcraft, etc. Forrester analyst Will McKeon-White told Yahoo Finance: “When there are too many games falling into Some huge organizations, I'm really worried."

If you are a Microsoft player then this is good news. Because the games above will all be available on Xbox and PC. And if you are a player of Nintendo, Sony, ... this information may make you appear worried when your favorite games are removed. Despite the fact Nintendo gamers are rarely swayed by rival games.

Usually, console companies will use exclusive game titles to attract players. For example halo on Xbox, Uncharted on PlayStation and Super Mario Bros on Nintendo. Therefore, 3rd party game studios play an extremely important role in the industry, providing quality game titles that are not restricted to any platform.

If a game is successful, the studio will try to bring it to as many platforms as possible, from PC to console or even mobile. The more people that reach the game, the more opportunities the company has to make money. That's when 3rd party studios are not bound by exclusive contracts.

However, as the trend of mergers and acquisitions spreads in the industry, such cross-platform games are in danger of disappearing. From 3rd party games that are not tied to any platform, they are now turned into first party games, released only on the platforms of the owned company. For example, Starfield is exclusive to PC and Xbox at Microsoft's discretion, bypassing Sony and Nintendo platforms.

Microsoft is service-oriented

There are 3 reasons you can see quickly to understand why Microsoft spends nearly 70 billion USD. First, it makes gamers unable to leave their Xbox platform, which is far behind PlayStation. Second, the company can make the Game Pass package more attractive, ensuring more titles on this site. Finally, acceleration in the mobile gaming segment.

Of these, the second reason is the biggest. Microsoft is selling Game Pass for $15/month, allowing you to play more than 100 different games regardless of hardware. Players can access from smartphones, tablets, laptops or even smart TVs. They are aiming for a service like Netflix, the addition of Activision Blizzard to the game library certainly makes it even more attractive in the eyes of users.

Reduce the attractiveness of rival platforms

If Microsoft decides that future Activision Blizzard games will not appear on the PlayStation, it will be a loss to the Sony user community. Of course, the Japanese company also has quality exclusive titles like Spider-Man, Gran Turismo, Rachet & Clank, Ghost of Tsushima, God of War, etc. However, Microsoft's addition is really worth it. be afraid.

Analyst Junya Ayada added that the acquisition comes at a difficult time for Sony. When PS5 slowed down because of limited supply, making it very difficult for customers to buy the device. Development of top games has been delayed by the COVID-19 pandemic, with reduced productivity as many people have to work remotely. There have been a number of blockbusters on PS5 that had to leave the release date.

Just a temporary hype

However, analysts from JP Morgan are still optimistic that Sony shares will recover soon. Maybe investors are overreacting to this news, but in the long term, Sony still has a lot of growth potential. They still have a lot of other businesses that are doing pretty well, especially the studio with the recent release of Spider-Man: No Way Home.

Many people believe that Sony will make an acquisition of a major game company in response to this passive situation. However, analyst Kota Ezawa thinks otherwise. According to him, the PlayStation platform can find customers in a different direction, focusing on making profits from the service network associated with anime, movies, and music. He thinks that Sony does not need to race to buy.



Many analysts also agree that the stock plunge is just a temporary hype. Because the video game business only contributes 30% of revenue and about a quarter of profit for the corporation. They don't just live off of PlayStation. Naoki Fujiwara, from Shinkin Asset Management, said: “Games are an important source of revenue for Sony, but they still have many other branches such as electronics, sensors, movies, …”.
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