Sony buys Bungie, Microsoft takes Activision, the great video game war has begun – who’s next?

Expect more deals like Sony’s acquisition of Bungie and Microsoft’s earlier acquisition of Activison Blizzard.

A food frenzy for video game makers is now in full swing. The obvious question is: who’s next? Sony Group Corp. said Monday it has reached an agreement to acquire privately-owned game developer Bungie Inc., the maker of two of the industry’s most successful game franchises, Halo and Destiny, for $3.6 billion. The deal comes just weeks after two other major gaming deals were announced: Microsoft Corp.’s planned $69 billion purchase of Activision Blizzard and Take Two Interactive Corp.’s deal for mobile game maker Zynga Inc. for $11 billion in cash and stock. And all of this followed Microsoft’s $7.5 billion acquisition of video game publisher ZeniMax Media last year.

Video game companies have become hot commodities for several reasons. First, the industry remains one of the largest and most attractive growth opportunities at the intersection of consumer products and technology. According to research firm Newzoo, the global gaming market will be about $219 billion by 2024, up from $180 billion last year.

Second, interactive entertainment companies offer an edge over what some say will be the next big thing: the so-called metaverse. The idea of ​​the metaverse is actually that of an always-on multiplayer video game, in which participants can combine their real and virtual worlds while going about their daily lives. While the idea is still largely theoretical, developing the concept requires skills and technology similar to those found in video games.

That prospect has caught the attention of top technology and entertainment names. Reed Hastings, co-Chief Executive Officer of Netflix Inc., has said the company is looking for a bigger player in the gaming sector. Major console platform owners such as Sony, Microsoft and Nintendo will want to continue to strengthen their in-house development capabilities and acquire more studios. Finally, if big tech companies are allowed by regulators to make big deals, expect Apple Inc., Meta Platforms and Alphabet Inc. will also be willing buyers.

Who will be bought next? Expect potential buyers to discover companies that possess an unusual combination of cutting edge, in-house game programming technology and the ability to build a super successful franchise.

A few names fit that bill, including Epic Games Inc., with its Fortnite and Unreal game engine; Electronic Arts Inc., owner of Respawn Entertainment studio’s Apex Legends game; Cyberpunk 2077 creator CD Projekt SA; and Take-Two Interactive Software, owner of the Grand Theft Auto game franchise.

As scale becomes more important, don’t be surprised if these companies see suitors on their doorstep.

Tae Kim is a Sirbpti Opinion columnist on technology. He previously covered technology for Barron’s, after a previous career as an equity analyst.

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Arun Agarwal
I am Arun Agarwal, a passionate blogger and gamer. I love to share my thoughts on games and technology through blog posts. I’m also an avid reader of books about history, philosophy, science-fiction, and other genres as well as an anime fan. I like reading books that give me new perspectives or help me think differently about the world around us.