Sony Stock Plummets After Microsoft Announces Plans to Acquire Activision Blizzard
The ink hasn't dried on the announcement that Microsoft was set to buy Activision Blizzard, and the repercussions are already being felt.
The Tokyo Stock Market reacted negatively today as shares of Sony Group (SNE) stock plunged almost 10 percent after the first hour of trading. That decline held firm all day, closing at a 12.78 percent loss. This is the largest stock value drop since October 2008, when Sony was forced to recall 100,000 laptop batteries due to fire hazards. As of this writing, Sony Group stock is down over 3 percent on the New York Stock Exchange after a double-digit drop in Tuesday's session.
RELATED: Activision CEO Bobby Kotick Reportedly Didn't Want Microsoft Acquisition
Microsoft's $68.7 billion purchase of Activision Blizzards's portfolio nets it some incredibly lucrative game franchises such as Call of Duty, Candy Crush, World of Warcraft, Overwatch, and Guitar Hero. A powerful library that some analysts are predicting will allow Microsoft to catch, if not surpass, Sony's commanding position in the video game industry. When finalized, this purchase will become one of the 20 largest such deals in history.
The purchase price was based on a $95 per-share price, which was roughly 45 percent more than Activision's value prior to the announcement of the sale.
Over 25 million players currently use Microsoft's Game Pass subscription service. Sony’s PlayStation Plus service logged 47.2 million subscribers at the end of September of last year. However, with Microsoft adding Activision's 400 million global monthly players, analysts think Sony will be forced to respond in some manner as it is believed Microsoft could make all the Activision Blizzard games they just purchased exclusive to Xbox, hurting
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