PlayStation-Maker Sony Faces Deep-Pocketed Rivals in War Over Gaming's Future as Microsoft Acquires Activision
Sony, perched atop the gaming sector, is facing a fresh challenge from cash-rich rivals betting on a next-generation online video game boom as the Japanese conglomerate eyes expansion on multiple fronts, including electric cars.
Microsoft, a laggard in the generational console battle with Sony, took a major step to position itself for the "metaverse" - a proposed immersive experience where people game, shop and socialise online - with a $69 billion (roughly Rs. 5,13,560 crore) deal for Call of Duty developer Activision Blizzard.
Sony's shares slumped 13 percent on Wednesday amid concern Activision titles would be pulled from PlayStation systems.
"They're basically trying to build a monster," said Serkan Toto, founder of the Kantan Games consultancy in Tokyo. "I don't think Microsoft is spending $70 billion (roughly Rs. 5,21,000 crore) to become a software provider for Sony platforms."
The full frontal approach contrasts with Sony, which has made incremental deals and gained praise for building a network of in-house gaming studios that have produced hits such as Spider-Man and God of War. Analysts say it - and other giants - may now feel pressure to make more deals in response.
Microsoft's deal for Activision is made possible by its vast array of other businesses, including software and cloud services, with its market capitalization more than 14 times that of the Japanese conglomerate.
Many observers see Activision as a tarnished business after allegations of sexual harassment and misconduct by managers and with its major franchises losing momentum, analysts say.
The developer is "basically a semi distressed asset," said Mio Kato, an analyst at LightStream Research writing on the Smartkarma platform. "This
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