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Sony Loses $20 Billion in Market Value After Microsoft Acquires Activision Blizzard

The recent Microsoft acquisition spells trouble for Sony’s investors, what does the future hold for PlayStation?

Microsoft have become a company not shy in throwing cash at publishers and developers in order to bolster their IP catalogue. A company who for the past few years have struggled to find an identity beyond Halo and Gears of War, the Seattle tech giant has begun sweeping in and buying anything they can to provide a better raft of first-party content.

19th January 2022 was no different, however it felt a little more monumental. Announced, seemingly out of the blue, Microsoft have paid over $68 billion for Activision Blizzard in a move that has left competitors, Sony, reeling. Given how Microsoft have shifted the focus of Bethesda, their last large-scale takeover, players and investors are now puzzling over what titles from the Activision roster will still land on PlayStation.

With this uncertainty looming, investors have become increasingly worried, wiping over $20 billion from Sony’s market value in just 24 hours.

Where did that $20 billion go? According to the Financial Times, shares rose in several videogame companies, giving us the idea that maybe investors are hedging their bets by investing in smaller developers and publishers in case Sony decides to splash some cash themselves to combat the loss of Activision IP. Both Square Enix and Capcom saw more than a 3.5% increase, while Konami got a boost of 3.25%.

The wipe of $20 billion ended a 21-year high for Sony stock and it seems the core worry is the Call of Duty franchise. Call of Duty, whose yearly reinvention and expansion can garner billions of dollars in profits might never again appear on a Sony console. Whether the next Call of Duty entry ends up on PlayStation is now anybody’s guess, though it would be foolish for Microsoft to gatekeep the series to their own consoles given the value and history of the series.

In the purchase, Microsoft now own the Call of Duty eSports league, meaning their branding will now adorn team shirts, livestreams and league promotion. They now also own several marquee franchises; Overwatch, Starcraft, Warcraft, Spyro the Dragon and Crash Bandicoot.

Of course, we can’t forget that along with these IPs Microsoft are now in charge of rebuilding Activision Blizzard and cementing a healthy work culture for employees. The news of 2021, which saw many staff walkouts and investigations into abuse towards staff throughout the company must take precedent for Microsoft.

Will Sony retaliate with buyouts of their own? It’s hard to say. Sony is in an unfortunate position for the first time in years. Their latest console, the PlayStation 5, suffered a rocky launch with many players unable to buy the unit. Plus, the Japanese company also finds themselves combatting Microsoft’s Game Pass system, which charges players a monthly fee for access to hundreds of games, including many leading titles on day one of launch.

Rumours have circulated recently that Sony has their version of Game Pass waiting in the wings, which would certainly give the investors and players something to celebrate, particularly if Sony can add to their first-party studios, too, but losing $20 billion is going to make studio acquisitions a much tougher prospect.

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