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The Game of Acquisitions

Within the last two weeks, the gaming industry has seen large acquisition proposals worth $81 bn in total, but an even more trend-changing fact is that it is the value of only two deals. First is the acquisition of Zynga worth $13Bn and the other is Activision worth $68 Bn.

This is surely a very different start to the merger & acquisition arena as the gaming industry has mainly witnessed below $5Bn deals on average. The pandemic, data importance, and future of Metaverse are surely factors in such a high valuation decision. But if the Activision deal is looked at there can be another interesting factor to it.

Let me explain, Activision has games such as Call of Duty, Warcraft, and Candy Crush. These are major games with top ranks within their category resulting in millions of players and millions of devices. Within such devices, gaming consoles are the largest and within it, there are two major companies Sony and Microsoft.

Activision acquisition is proposed by one of them and that is Microsoft.

By now if you can discover the factor, I will provide a reference. In 2014 Microsoft did its first gaming company acquisition that was available on both platforms but posts the acquisition any new label approval on the Sony platform became on case to case basis. This did not hamper much as the label sales were limited. But if the same strategy is applied to the Activision deal then Sony has a big problem and its title of second-largest gaming company is in trouble.

This for sure will bring new momentum to M&A in the gaming industry as Apple fights out with Fortnite and Amazon deploys its Luna platform.


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