Gaming is Making Big Tech Bigger

The gaming wars have been heating up as of late with Sony’s recent purchase of Bungie, the game studio known for creating the Destiny and Halo franchises. The acquisition signals a shift by Sony towards a bigger audience than what their current PlayStation has to offer, but as the gaming wars heat up even further, they will certainly not lack competition.

Sony’s announcement of the $3.6 billion acquisition, its largest gaming-related deal, comes on the heels of a string of big moves into the space, such as Microsoft announcing a $68.7 billion deal to acquire Activision Blizzard, Amazon’s 2014 acquisition of Twitch and expansion of their cloud gaming catalog, and Netflix’s CEO promising to be the absolute best gaming service in the industry.

Bungie’s annual revenue has been estimated to be within the low hundreds of millions, just a fraction of Sony’s current gaming business, but the gaming studio’s talent for online games is something that Sony lacks, making this acquisition critical given that the user bases of the most popular video game titles can often outgrow the populations of many countries around the globe.

Bungie brings, “world-class expertise in multiplatform development and live game services,” Sony stated recently in a press release.

Microsoft’s Activision deal helped the tech giant snag one of the most popular first-person shooter titles, the Call of Duty franchise. However, while Bungie was owned by Microsoft in 2000–2007, Bungie had launched the Halo franchise, which at the time became a centerpiece of Microsoft’s Xbox marketing strategy. Bungie then released Destiny, an online multiplayer shooter once it became an independent company again.

Bungie’s main offering now is Destiny 2, a multiplayer online shooter that is offered on a range of different platforms, including but not limited to both PlayStation and Xbox. The game reportedly has more than 38 million registered players worldwide. Sony, meanwhile, has focused mainly on role-playing games exclusive to the PlayStation. It lacks Bungie’s expertise in building communities from widely dispersed player bases and building big titles for a variety of different platforms.

Sony has been reaching out beyond its PlayStation focus through outside partnerships, taking minority stakes in “Fortnite” producer Epic Games in 2020. The Bungie acquisition accelerates this trend by Sony.

One unusual aspect of the Sony-Bungie deal is Bungie’s degree of independence. The company will not become part of PlayStation Studios — Sony’s worldwide network of 17 in-house game studios — and Bungie said on its website that future games will not be PlayStation exclusives. The studio will remain focused on cultivating multiplatform games with big audiences like the Destiny franchise.

Microsoft’s planned acquisition of Activision raised questions about whether Microsoft would make some of Activision’s most popular game franchises exclusive to the Xbox platform. Those questions were put to rest when executives from Microsoft, Activision and Sony highlighted existing agreements between the companies. Bungie has already made it clear that its current and future games will not become PlayStation exclusives.

Source: Brookfield Brief