It looks like the console wars are getting ever more expensive. Where once Sega and Nintendo battled it out for supremacy for the valuable space in front of the TV, nowadays the competition can be across multiple platforms and even up in the clouds. And with ever growing consolidation, as giant games companies gobble up smaller ones, no one wants to be left behind.
The Financial Times reports that Sony is looking to get even more serious with mergers and acquisitions. At a news conference, Sony’s president Hiroki Totoki said the company could spin off its financial arm in order to ramp up its investment capabilities. “In order to expand our growth over the medium to longer term, we will need the ability to invest in image sensors and the entertainment business at a completely new level,” Totoki said.
The games industry has been consolidating for some time, but recent activity has been both of a higher intensity and size, with the likes of Take-Two buying up Zynga for $12.7 billion, Sony acquiring Bungie for $3.6 billion, and there’s also of course the case of the mammoth $68.7 billion deal that Microsoft is still trying to push through for Activision Blizzard. Microsoft in the past few years also acquired ZeniMax Media/Bethesda Softworks for $7.5 billion. Meanwhile, games colossus Tencent has also been increasing its stakes in various games companies, most notably Ubisoft.
Sony is a conglomerate with various businesses, of which PlayStation is one, but the company also includes its lucrative image sensor arm, which supplies camera sensors to many mobile phone manufacturers, for example, as well as its financial unit, which includes the group’s online banking and insurance businesses. It’s this financial arm that Sony wants to list publicly to generate the necessary funds to invest in other companies, while it would still retain around 20 percent.
The FT quoted longtime Sony analyst David Gibson, at MST Financial, who said the initial public offering of Sony Financial would help the company be “aggressive” in merger and acquisitions. “Consolidation in entertainment has been happening and Sony doesn’t want to be left behind,” Gibson told the Financial Times. Investors seem happy with Sony’s plans as its share price rose following the news.
Sony has been beefing up its entertainment arm besides video games, with acquisitions of EMI Music Publishing for $2.3 billion and $1.2 billion for anime streamer Crunchyroll in the past five years, while it has also taken stakes in Elden Ring maker FromSoftware. While Microsoft and Sony are both consolidating, the other major console player, Nintendo, has said it’s not pursuing the same strategy.
Source: THEGAMER