Sony will acquire Bungie, the original creator of the “Halo” videogame, in a deal valued at $3.6 billion, making it the latest in a wave of consolidations sweeping the gaming sector.
Bungie will join Sony’s PlayStation family, the U.S. company said, as the Japanese conglomerate strengthens its network of in-house gaming studios behind hits such as “Spider-Man” to take on cash-rich rivals.
“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. Like Bungie, our community is core to PlayStation’s DNA, and our shared passion for the gamer and building the best place to play will now evolve even further,” said Jim Ryan, president and CEO at Sony Interactive Entertainment.
Microsoft, whose XBox consoles have long lagged Sony’s PlayStation in sales, pitched a whopping $69 billion for “Call of Duty” maker Activision Blizzard earlier in January.
“While this is one of Sony’s biggest ever acquisitions, the amount paid by Microsoft puts into context the heavy competition faced in this sector,” said Piers Harding-Rolls, gaming analyst at Ampere Analysis.
Post-acquisition, Bungie will be an independent subsidiary of Sony Interactive Entertainment and run by its Board of Directors chaired by Pete Parsons and Bungie’s current management team.
“Both Bungie and SIE believe that game worlds are only the beginning of what our IP will become. Our original universes have immense potential and, with SIE’s support, we will propel Bungie into becoming a global multi-media entertainment company dedicated to delivering on our creative vision,” said Parsons, CEO at Bungie.
Gaming industry faces fierce competition from major players
The video game space is consolidating rapidly to tap a surge in demand created by the pandemic, with new deals blurring the lines between PC and mobile gaming companies as these firms hunt for new revenue streams.
The sector is on course for a new record of $150 billion in deals, financing and IPOs this year, according to investment banking firm Drake Star Partners. In yet another mega-deal in just the first month of the year, “Grand Theft Auto” maker Take-Two bid $11 billion for “FarmVille” maker Zynga.
Big names companies have also been trying to bring talent and intellectual property behind popular titles in-house rather than partnering with studios, giving them more access in a growing, high-value market. Sony has added a number of developers, including “God of War” co-developer Valkyrie Entertainment, “Returnal” developer Housemarque and others under its umbrella.
Bungie now plans to hire more talent across the studio for “Destiny 2,” a videogame previously published by Activision Blizzard.