Sony Interactive Entertainment (SIE), a subsidiary of electronics group Sony, agreed yesterday to acquire US-based video game developer Bungie in a $3.6bn deal allowing internet and online gaming company NetEase to exit.
Bungie, which was founded in 1991 and is responsible for the creation of the Halo and Destiny game franchises, will operate as an independent subsidiary of SIE following the acquisition.
The news came two weeks after the announcement of an even larger rival deal: the planned $68.7bn takeover of Activision Blizzard, the studio that oversees game franchises including Call of Duty, World of Warcraft, Guitar Hero and Candy Crush, by Microsoft, producer of the Xbox gaming consoles.
In the past, such acquisitions would likely mean the underlying games would become exclusive to their owner’s system. However, Sony, manufacturer of the PlayStation, has confirmed Destiny will remain a multiplatform game after the takeover.
By a similar token, Microsoft is not making a game like Call of Duty – which has experienced massive sales on PlayStation since its early editions – exclusive to Xbox. The exclusivity of titles in luring gamers away from rival systems has diminished in favour of the maximisation of intellectual property and content.
Unlike Microsoft, Sony Entertainment owns a large film studio, and the rights to a sci-fi universe as potentially expansive and popular as Destiny’s opens up a world of options for use in other content mediums, including in an online streaming market where the company has not made significant moves to date.
The markets have reacted positively to the Bungie deal, pushing up Sony’s share price, though it has yet to fully recover from the tumble it took after the Activision Blizzard deal.
Microsoft is a previous owner of Bungie, having bought it in 2000 before it was spun off again in 2007, though Microsoft retained the intellectual property of the Halo games which have remained exclusive to the Xbox since. NetEase bought a minority stake in Bungie in 2018 for a reported $100m.
Jim Ryan, president of SIE, said: “We have had a strong partnership with Bungie since the inception of the Destiny franchise, and I could not be more thrilled to officially welcome the studio to the PlayStation family.
“This is an important step in our strategy to expand the reach of PlayStation to a much wider audience. We understand how vital Bungie’s community is to the studio and look forward to supporting them as they remain independent and continue to grow.”
The past month has witnessed a third multibillion-dollar M&A deal in the gaming sector, with Take-Two Interactive, owner of studios including Rockstar and 2K Games, agreeing to acquire social media game developer Zynga in a $12.7bn deal.
Together, the three deals represent more than double the M&A volume across the entire gaming industry over the course of 2021, which stood at $38bn according to Drake Star Partners, and are equivalent to the total deal value, including fundraising and initial public offerings, in the same year.
Image courtesy of Bungie, Inc.
