Sony Calls God of War PC a Success, Explains Bungie Deal Is Structured to Encourage Employee Retention
During Sony's Q3 2021 earnings call, Executive Deputy President and Chief Financial Officer Hiroki Totoki briefly mentioned the recent God of War PC launch as a success on the road of expanding PlayStation IPs to a larger audience.
In addition, the deployment of game IPs on multiple platforms is a major growth opportunity for Sony as has been evidenced by the successful PC version of God of War and other first-party games.
Indeed, God of War PC was the best-selling game on Steam for several weeks after its early January debut. Steam Spy estimates put sales between one and two million units, and the user review score is also 'Overwhelmingly Positive' thanks to a 97% approval. That's more than warranted, as it's easily the best PC port made by Sony yet.
Later in the earnings call, Totoki explained that the $3.6 billion deal to acquire Bungie is structured specifically to encourage employee retention at the company.
Bungie is a private company, the majority of whose shares are owned by its employees. So the payment of the consideration is structured to incentivize the shareholders and other creative talent to continue working at Bungie after the acquisition closes. Approximately one-third of the $3.6 billion consideration for acquisition consists primarily of deferred payment to employee shareholders, conditional upon their continued employment and other retention incentives.
These amounts will be paid over the course of several years after the acquisition closes, and will be recorded as expenses for accounting purposes. We expect about two-thirds of these deferred payments and other retention incentives to be expensed in the first two years after the acquisition closes.
Just before the end of the Sony Q3 2021 earnings call, Naomi Matsuoka (Senior Vice President, Incharge of Corporate Planning and Control, Finance, and IR) admitted that Sony purchased Bungie partly because its existing internal teams can learn a lot from the makers of Destiny (and Halo) when it comes to live service games, which are poised to become a major component of Sony's game offering in the next few years. On the other hand, Bungie is looking to leverage Sony's transmedia expertise just as we had assumed.
They have the ability to distribute to a variety of platforms and also live service, they have the capability to develop that. Those are things we have lots to learn from them. And therefore, our studios will learn from Bungie and that is a very strong wish we have. And Bungie's side also is willing to work closely with us. And in the first year, we believe we'll put together a good plan and drive that and I believe it will generate upside from that kind of work.
Now for Bungie, I think we could - we can help them and support them in the personal retention, and recruiting. We hope to be able to do so. And also not just for gaming area, but the multi using of IP and merchandising of IPs, maybe put into the pictures, movies, and Bungie wants to nurture the IP they have in the multi-dimensional manners and that's their hope. And for that we believe, we can help that. We have pictures and music and Bungie can leverage our platform, so that the IP can grow bigger.
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