With the industry still reeling from the shock of the Microsoft + Activision Blizzard deal, Sony delivered a quick counterpunch (albeit one that had been in the works for several months, to be sure) this week by announcing the acquisition of Bungie for $3.6 billion.
That sounded like a lot of money for a developer that owns a single albeit big IP, Destiny. There are much bigger game companies with a market cap that's not far off that figure: SEGA is currently valued at $3.8 billion, for instance, while Square Enix is a bit higher at $5.8 billion.
Still, when we asked Karol Severin (Senior Analyst and Product Manager at MIDiA Research) whether Sony's money had been well spent on Bungie, he pointed out that the synergies between the two companies could make it a very lucrative deal for both sides.
When assessing whether this was a good use of $3.6bn, the company fundamentals are of course important, but you also need to consider any strategic premium (benefits) in terms of where this acquisition can take PlayStation’s in the mid-term future, in way of synergies.
PlayStation is going after live services, which Bungie has a lot of expertise in. Sony has to go after live-service more aggressively than ever before, given the traction in the gaming space and the model being increasingly offered to and adopted by consumers. The multi-platform decision will be in a similar tune. Multiplatform is becoming table stakes, so it's right for Sony to pursue, in order to minimise competitive pressures from others and maximise revenue potential.
As I said many times in the past though - Xbox’s future is cross platform, PlayStation’s future is cross-entertainment. PS is following the market in terms of cross platform, but it can lead in terms of drawing synergies for gaming from across entertainment (in video, music, sports and social in particular).
Bungie's live services expertise will likely contribute to that journey. As per GamesIndustry.Biz interview, Jim Ryan (SIE CEO) says:
"Philosophically, this isn't about pulling things into the PlayStation world. This is about building huge and wonderful new worlds together."
Lastly, despite Destiny 2 being the key current title at the moment, Bungie is of course no one hit wonder. It stood behind the creation of Halo and even though it no longer owns it, it does count towards its track record of producing hits with longevity. If Bungie can continue this success in the future, help Sony grow live-services communities, and contribute to activating Sony’s cross-entertainment potential, the deal could prove to be very lucrative for both sides.
In that same interview, Jim Ryan confirmed that Bungie's acquisition wouldn't be the last one for Sony. We reckon the same is true for Microsoft after Activision Blizzard (provided that the deal goes through, which is a little less taken for granted now that the US Federal Trade Commission has been confirmed to be the one reviewing it). The Great Consolidation of the gaming industry continues, and we'll be here reporting on it. Stay tuned.
About the author: With over two decades of experience in gaming journalism, Alessio Palumbo has led the gaming vertical at Wccftech since August 2015. He started working at a young age for Italian websites like Everyeye.it, Gamestar.it, Nextgame.it, and Multiplayer.it before kickstarting the indie English-language publication Worlds Factory as its founder and Editor in Chief. In the last decade, he has coordinated the overall output of Wccftech's gaming section, managed PR relations, assigned reviews, produced daily news coverage, edited gaming content as needed, and delivered game reviews. Arguably, his trademark content is the long series of exclusive developer interviews that have been cited by Wikipedia and by the biggest news media and gaming publications. His passion for technology also makes him knowledgeable when it comes to gaming hardware and tech. His favorite genres include RPGs, MMORPGs, and action/adventure games.
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