Microsoft acquired activision for $70 billion. Sony Group, perched atop the gaming sector, is facing a fresh challenge from cash-rich rivals betting on a next-generation online video game boom as the Japanese conglomerate eyes expansion on multiple fronts, including electric cars.
But the over $2 trillion giant Microsoft finds gold dust in its largest deal ever. As it devours maker of iconic video games like Call of Duty and Candy Crush. Activision Blizzard itself is a $65 billion market cap company. Sitting at the top deck is Microsoft, followed by China’s Tencent, which again is a mammoth $550 billion entity.
Microsoft Corp, a laggard in the generational console battle with Sony, took a major step to position itself for the “metaverse”- a proposed immersive experience where people game, shop and socialise online – with a $69 billion deal for “Call of Duty” developer Activision Blizzard.
“They’re basically trying to build a monster,” said Serkan Toto, founder of the Kantan Games consultancy in Tokyo. “I don’t think Microsoft is spending $70 billion to become a software provider for Sony platforms.”
The full frontal approach contrasts with Sony, which has made incremental deals and gained praise for building a network of in-house gaming studios that have produced hits such as “Spider-Man” and “God of War”, it – and other giants – may now feel pressure to make more deals in response.
Microsoft’s deal for Activision is made possible by its vast array of other businesses, including software and cloud services. With its market capitalization more than 14 times that of the Japanese conglomerate.
Many observers see Activision as a tarnished business after allegations of sexual harassment. And misconduct by managers and with its major franchise. “This backward-looking nature to Microsoft’s strategy is what makes us sceptical about their ability to compete with already famous PlayStation.”