Sony is buying video game developer Bungie for $3.6bn, marking the latest deal in a wave of consolidation that has swept the gaming sector this month.
The PlayStation owner’s acquisition of the company behind the Halo franchise comes less than two weeks after Xbox maker Microsoft agreed to buy video game developer Activision Blizzard for $75bn, its largest ever deal and one that reflects how technology and entertainment groups are seeking dominance in the sector.
Bungie, a 31-year old company based in the US’s Washington state, is the driving force behind hit franchises Halo and Destiny. The deal is set to heighten competition between Sony and Microsoft’s gaming offerings, as they spend to capitalise on demand and explore opportunities in the metaverse, the name for virtual worlds that many tech companies are pursuing as a new business.
Bungie was bought by Microsoft in 2000 and then spun off in 2007, with the software giant retaining the rights to the Halo franchise. It has since grown to more than 900 employees and intends to open an Amsterdam office this year.
“Both Bungie and [Sony Interactive Entertainment] believe that game worlds are only the beginning of what our IP will become,” said Pete Parsons, chief executive of Bungie. “Our original universes have immense potential and, with SIE’s support, we will propel Bungie into becoming a global multimedia entertainment company”.
Bungie emphasised that it will remain an independent studio whose games would not be confined to PlayStation, saying the biggest change will be “an acceleration in hiring talent across the entire studio to support our ambitious vision.”
Sony’s shares jumped 4.5 per cent in afternoon trading in New York.
Pelham Smithers, an independent analyst, called the acquisition a defensive move that would give Sony leverage should Microsoft ever try to make an Activision title such as Call of Duty exclusive to Xbox. In that event, he said, Sony could now threaten to make Destiny 3 a PlayStation-only game.
“It’s mutually assured destruction,” he said.
The month of January has seen more gaming deals than all of the prior decade combined, according to Dealogic, beginning with Grand Theft Auto maker Take-Two Interactive paying $12.7bn to purchase mobile gaming specialist Zynga, the maker of FarmVille and Words with Friends.
Bungie called Sony “a partner who unconditionally supports us in all we are.”
“We remain in charge of our destiny,” Bungie said on its website. “Our games will continue to be where our community is, wherever they choose to play. ”
