Microsoft, Sony, and others have no reason to slow down their acquisition sprees

venturebeat.com:

Acquisition season is still upon us, and it’s not going to let up anytime soon. In January alone, Take-Two bought Zynga for $12.7 billion, Activision Blizzard is selling to Microsoft for $69 billion, and Sony capped off the month with its $3.6 billion Bungie deal. It’s natural to expect the acquisition market to cool off after such a hot start to the year, but conditions will likely keep many companies on the hunt.

One of the biggest factors fueling the acquisition arms race is that many of the big players are succeeding in their current strategies. Sony’s PlayStation and Microsoft’s Xbox are both more profitable than ever. They have made desirable consoles that stores cannot keep in stock, and their games continue to set a new bar in terms of quality. With such strong fundamentals, the companies can afford to fund inorganic growth. This extends beyond Microsoft and Sony. The entire gaming market is still on a high from strong sales throughout the pandemic, and they are looking at ways to maintain that momentum for long-term success.

Many publishers are in this position of wanting to turn a temporary upturn into something that can serve as foundational revenue for the next 10 years. Microsoft bringing in King does this. Sony bringing in live-service darling Destiny also accomplishes this goal. But with so many huge corporations looking to expand their businesses, that creates an urgency to make moves sooner rather than later. Bungie has entertained offers for years now, but Sony pulled the trigger now because it didn’t want to miss its chance.

That urgency is crucial to understanding the market because it doesn’t just affect the buying side of these deals. If you started a studio in the last 20 years, now looks like the