Sony’s stock has plummeted in Tokyo trading after Microsoft announced its intention to buy Activision Blizzard, a major video game publisher.
The $68.7 billion transaction would be Microsoft’s largest ever buyout and the largest gaming agreement ever.
The deal would give the US company control of popular gaming properties such as Call of Duty, Warcraft, and Overwatch.
The agreement would be a significant step forward for Microsoft’s Xbox gaming platform in its fight against Sony’s PlayStation.
It also comes a year after Microsoft paid $7.5 billion for Bethesda, another powerful game developer.
By acquiring Activision, Microsoft would become the world’s third-largest gaming company by revenue, behind China’s Tencent and Sony, signalling a huge shift in the industry.
The Activision-Blizzard acquisition, according to Microsoft, would help it grow its gaming business across mobile, PC, and consoles, as well as provide the metaverse’s building blocks.
Microsoft’s acquisition of the Call of Duty developer coincides with the company’s aggressive expansion of its Game Pass subscription programme.
“We’re investing deeply in world-class content, community and the cloud to usher in a new era of gaming that puts players and creators first and makes gaming safe, inclusive and accessible to all,” Microsoft’s chief executive Satya Nadella said in a statement.
Sony’s PlayStation 5 is usually seen as having the upper hand over Microsoft’s fourth-generation Xbox devices in the popularity stakes. Sony has bolstered its network of in-house game studios in recent years and delivered a run of exclusive hits, including the Spider-Man franchise, leaving its US rival playing catch-up.
The Japanese company is also a pioneer in virtual reality, and it teased some details about its next-generation headset earlier this month. However, non-traditional competitors such as Facebook owner Meta Platforms, which is significantly investing in its metaverse offering, pose a serious threat.
Sony Group’s stock fell 12.8 per cent in Tokyo on Wednesday, contributing to a 2.8 per cent decline in the Nikkei 225 index.
(Adapted from NDTV.com)