PlayStation maker Sony slumps shares after Microsoft’s Activision Blizzard | business news
Shares in PlayStation maker Sony have slumped after rival Microsoft, the company behind rival games console Xbox, agreed to buy games developer Activision Blizzard for $68.7bn (£50.5bn).
The Japanese tech giant slumped nearly 13% hours after the Tokyo session This was announced by the US company it would buy the company whose titles include Call of Duty and Candy Crush.
It represents a new challenge in the console battle, in which the PlayStation is widely considered to have the upper hand at the moment.
The concern for Sony could be that Activision games could be removed from PlayStation systems – although that would mean sacrificing the main revenue stream that PlayStation currently offers to the developer.
It could also put pressure on the Japanese conglomerate to respond with large acquisitions of its own.
Sony has bolstered its network of in-house game studios in recent years and has delivered a string of hits, including in its Spiderman franchise.
It also has titles like Gran Turismo 7 and Horizon Forbidden West in the pipeline.
Microsoft has leaned heavily on its Halo series, the latest installment of which was delayed ahead of its December release.
In the meantime, it has aggressively expanded its Game Pass subscription service.
In announcing Tuesday’s acquisition of Activision, Microsoft CEO Satya Nadella said it would give the Xbox company a leap into the mobile gaming sphere and position it for a key role in the “Metaverse,” a proposed immersive experience that will see people online shop, play and socialize.
Sony is a global conglomerate behind products like TVs and smartphones, and owns film and music companies.
But Microsoft, which makes software and offers cloud services, has a market cap more than 14 times larger.
MST Financial analyst David Gibson told the Financial Times, “The market is wondering what could happen to Call of Duty.
“It looks like economic suicide for Microsoft to make the franchise exclusive to their own platform, but they might not care if it makes their platform stronger.”