Business & Investment

After signing with Activision, gaming industry insiders bet on acquisition frenzy

The merger takes the gaming industry to the next level: After the Call of Duty maker is acquired in a £ 50 billion deal, insiders bet on the wave of acquisitions


The £ 50.6 billion acquisition of Call of Duty maker Activision Blizzard by Microsoft has shocked the computer gaming industry.

Japanese conglomerate Sony shares plummeted by more than 12% amid concerns that trading could threaten sector dominance.

However, stocks of other companies soared in the hope that they could ride the wave of integration as buyers or targets.

Explosives: Grand Theft Auto Maker Take Two’s share surged 9.2%, while Frontier Developments for the groups listed on the AIM rose 6.6%.

Activision’s rival Electronic Arts’ share has risen 5.5% since trading, Grand Theft Auto maker Take-Two Interactive has risen 9.2%, and AIM-listed group Frontier Developments has risen 6.6%.

French developer Ubisoft has increased by 15% since the acquisition was announced on Tuesday. The merger, due to be completed next year, is the largest ever in the field and is in the midst of a battle for control.

This makes Microsoft the third-largest computer game company in the world after Sony and Tencent in China, with a large scale game pass subscription service that provides players with a library of games in a similar fashion to Microsoft’s Xbox game console. Provides leg-up. How people watch movies and TV shows through Netflix.

Strengthening the Xbox is a challenge for Sony, the market leader in PlayStation consoles. The Activision Blizzard raid will occur as the acquisition spreads across the global video game market.

Earlier this month, Grand Theft Auto maker Take-Two Interactive acquired Farmville maker Zynga after Microsoft acquired video game studio Bethesda, the owner of franchises such as Doom and Wolfenstein last year.

In the UK, Southam-based racing game developer Codemasters was raided by Electronic Arts, followed by the acquisition of Sheffield’s Sumo Group by Tencent.

London-listed Team 17 also acquired German simulation game developer Astragon Entertainment for £ 83m.

Following the boom in demand for computer games during the pandemic, active activity is taking place.

The Activision Blizzard raid is the largest acquisition to date in an ongoing wave of mergers and acquisitions that have swept the global video game market.

The Activision Blizzard raid is the largest acquisition to date in an ongoing wave of mergers and acquisitions that have swept the global video game market.

The new audience and subsequent profits shed light on industries that were previously of little interest.

“There is a lot of investment going on. Demographics are extensive. They have all these fascinating qualities that have been highlighted and increased by the pandemic,” said Katie Cousins, an analyst at Shore Capital. ..

“People have begun to understand how valuable these titles are. There is an entire community of games that get together with friends, much like going to a soccer pitch and playing. Its social and community. The environment is very valuable.

Activision Blizzard owns several titles with millions of players. Its Call of Duty has sold over 400 million copies since 2003 and is one of the best-selling computer games in the world.

The online multiplayer fantasy game World of Warcraft has about 6.1 million players per month.

Cousins ​​said these gaming communities can produce other forms of media, including books and online series, but companies can only benefit if they manage intellectual property (IP). ..

“That’s why we’re in a hurry to collect these IPs,” Cousins ​​said, adding that it’s easier for most companies to buy an already popular game than to create a new one. rice field.

The scramble includes Disney’s purchase of the Star Wars franchise from creator George Lucas for £ 3 billion in 2012, and Netflix’s acquisition of rights to the work of child writer Roald Dahl last year for £ 370 million. , Reflecting the surge in trading in the media sector.

It’s in the midst of the rise of “Metaverse,” a virtual reality environment that tech tycoons such as Facebook founder Mark Zuckerberg believe will usher in a new era of online interaction.

Microsoft boss Satya Nadella said computer games “play an important role in the development of the Metaverse platform.”

The banquet seems to continue as more British companies ride on the crosshairs. Frontier Developments listed on AIM, which includes the Jurassic Park franchise in its games, is considered a target due to its successful game IP and falling stock prices. Inventory has dropped 34% in 6 months. Tencent is being considered as a potential buyer.

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After signing with Activision, gaming industry insiders bet on acquisition frenzy

https://www.dailymail.co.uk/money/markets/article-10420003/Gaming-industry-insiders-bet-takeover-frenzy-Activision-deal.html?ns_mchannel=rss&ns_campaign=1490&ito=1490 After signing with Activision, gaming industry insiders bet on acquisition frenzy

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