Posted Jan 31, 2022, 8:54 PMUpdated on Jan 31, 2022 at 8:59 PM
Sony’s (first) response to Microsoft in video games was not long in coming. This Monday, the maker of the PlayStation announced that it was buying the studio Bungie for 3.6 billion dollars. In recent months, mega-acquisitions have multiplied in the video game industry. And the phenomenon was further amplified in January.
Three weeks ago, Zynga (Farmville) fell into the hands of publisher Take-Two (GTA, Red Dead Redemption) for 12.7 billion. A week later, Microsoft, Sony’s direct rival with its Xbox, then caused an earthquake on the video game planet by getting its hands on Activision Blizzard (Call of Duty, World of Warcraft, Candy Crush) for nearly 70 billion. Unheard of in the sector. The cause of all this stock market and financial effervescence? Video games have been a sector on an upward trend for years and the content war there is intense as ever.
As a result, the major publishers and console manufacturers are buying game development studios at high prices in order to enrich their catalog and attract gamers. Already adversaries at home consoles for twenty years, Microsoft and Sony are also gradually deploying a new economic model, offering subscription offers similar to what Netflix offers with films, series and the like. In September 2020, Microsoft had already drawn its checkbook to offer itself, Bethesda (Doom, The Elder Scrolls, Fallout), for 7.5 billion dollars.
Microsoft put pressure on Sony
At the time, Sony had remained rather passive. The group then settled for a few defensive takeovers, securing its long-standing relationships with certain players in the sector, which Housemarque, which Nixxes, which Bluepoint. The group could afford it. The Last of Us, God of War, Spider-Man…: its catalog of exclusive content was then of a higher quality than that of Microsoft.
But by buying Activision Blizzard – the world’s leading publisher of games for home consoles and PCs – it put very strong pressure on Sony, which also fell heavily on the stock market in the wake of the announcement. Admittedly, the Redmond group has indicated that it does not intend, for the time being, to exclusively reserve games like Call of Duty for its only paying subscribers. But nothing will prevent it from doing so one day and thereby depriving the PlayStation of one of the most attractive licenses in video games. This explains the Japanese group’s quick reaction to the takeover of Bungie.
Little known to the general public, the latter has developed a posh franchise in video games with Destiny whose total sales amount, in all, to several tens of millions of copies. Created in the early 1990s, this development studio has had a lively run. In 2000, it was bought by… Microsoft to develop Halo – the tech giant’s flagship house license (which still owns the rights to it).
The Destiny License
In 2007, Bungie then bought the majority of its capital to emancipate itself from Microsoft before signing, three years later, an agreement with… Activision Blizzard, this time with a view to developing the Destiny franchise. The publisher has notably invested 500 million dollars in development and marketing for the first of the two games of this license which was marketed in 2014. The second was in 2017.
During the summer of 2018, Bungie then raised $100 million in a funding round led by Netease, one of the Chinese video game giants, before cutting its ties with Activision Blizzard a few months later. A blow for the latter because the studio then embarked with him the rights of Destiny – for future games -, with a view to self-publishing.
But Sony’s proposal and arguments have changed the minds of Bungie leaders, who will however continue to operate as an independent structure. For the time being, the Japanese group has indicated that future games from Bungie will be “cross-platform”. Translation, they will not only be reserved for PlayStation players but also accessible to those of Xbox and others. The game of liar poker has only just begun between Microsoft and Sony on this ground.