This post was originally published on this site
Investing.com – Sony stock (NYSE:SONY) traded up 1.2% in premarket Tuesday as it struck a deal to buy Bungie, a U.S. video game developer behind the popular Destiny and Halo franchises, for $3.6 billion.
Bungie will operate as an independent subsidiary of Sony once the transaction concludes.
Sony usually goes for small-ticket acquisitions in the videogame studios business but was forced to go for a big one after rivals clinched two large deals in January alone.
On January 10, Take-Two Interactive (NASDAQ:TTWO) agreed to acquire mobile game leader Zynga (NASDAQ:ZNGA) at an enterprise value of close to $13 billion. Then on January 18, Microsoft (NASDAQ:MSFT) announced the biggest deal in the gaming industry, acquiring ‘Candy Crush’-owner Activision Blizzard (NASDAQ:ATVI) for nearly $69 billion.
The Bungie purchase gives Sony one of the most popular first-person shooter games to compete with the massive Call of Duty series, which is now in Microsoft’s hands after the Activision acquisition.
The long-term growth of videogaming has intensified with the pandemic, as stuck-at home consumers found new ways to entertain themselves. It is now also seen as an important element of in the still-nascent ‘metaverse’ – a virtual world that allows people to interact with friends, play video games, watch a movie, study or attend a concert online. Microsoft’s, and now Sony’s acquisitions, are directed at a play in metaverse.
Bungie was founded in 1991 and helped put Microsoft’s gaming console Xbox on the map. Microsoft paid about $30 million to acquire the studio when it was mostly a Mac game developer, and then spun it off in 2007. Bungie worked on ‘Destiny’ with Activision. That relationship ended in 2019.
