Analyst Says More Big Gaming Acquisitions Are Likely

"Is it ever gonna be enough?"

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Analyst Says More Big Gaming Acquisitions Are Likely

In the wake of Microsoft announcing their enormous acquisition of Activision Blizzard, gaming industry analysts have taken to speculating whether or not more acquisitions could potentially happen. According to one, this is certainly the case, and it’s possible that Sony PlayStation might be the one to pull the trigger next.

Speaking to Wccftech, Karol Severin, Senior Analyst and Product Manager at MIDiA Research, gave some interesting insights into the negatives of Xbox keeping Activision Blizzard titles exclusive to their platform. One argument made is that Xbox will essentially cut off a huge portion of their revenue since a sizeable base of Activision Blizzard players exist on PlayStation, including the Call of Duty community. Severin states that Xbox wouldn’t be wise to push exclusivity unless they risk losing out on a big portion of the market.

READ MORE Microsoft to Acquire Activision Blizzard for $68.7 Billion

Severin’s full statement about Xbox’s acquisition and exclusivity plans reads:

“Given Xbox’s cross-platform and gamer-friendly narrative, the impact is less likely to be about ‘draconian exclusivities’ and more about ‘enhanced experiences’ on Microsoft-owned assets. The big hits, in particular, produce a significant (and often majority) revenue from the Sony side. It wouldn’t be financially sound to turn that revenue off, particularly because given Microsoft’s mega-portfolio (if the acquisition closes), it doesn’t need to. Engaging in hard exclusivity could risk alienating users on the other side, which still remain very valuable. Instead of exclusivity on whole titles, Microsoft can push more softly, e.g. through windowing access (e.g. first month of new CoD only on Xbox, not Sony), discounts, exclusive in-game content, experiences, etc.”

When touching upon the possibility of Sony also making acquisitions of their own, Severin stated that more big acquisitions are ‘likely’, though reiterated that Sony doesn’t have the answer to making as big of a purchase as Microsoft:

“A big response would be great for Sony – very important in slowing down the effects of Microsoft’s acquisition (IF it goes through, which Sony will be monitoring closely, I’d imagine). If it does go through, the sheer difference in company size will make it very difficult for Sony ($124 billion market cap) to come up with an acquisition answer comparable to what Microsoft ($2.3 trillion market cap) just announced. A similar dynamic applies to Nintendo at $54bn market cap. Having said that, more acquisitions are likely. M&A reportedly reached $85billion in 2021, three times that of 2020. 2022 almost beat that mark already (we’re at $81.4bn considering Zynga’s deal with Take-Two) and it’s not even the end of January!”

Either way you spin it, this could cause a ripple effect for what is possibly going to become a multi-billion dollar rat race.

Source: Wccftech

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