"We are not even in the final stage yet": Analysts on consolidation

gamesindustry.biz:

Jeffrey Rousseau

Staff Writer

Thursday 3rd February 2022

With Sony's $3.6 billion purchase of Bungie, Take-Two's $12.7 billion deal for mobile giant Zynga, and Microsoft's massive $68.7 billion acquisition for Activision Blizzard, the month of January has seen a lot of consolidation.

Those three deals alone total $85 billion, which matches the mergers and acquisitions total for all of 2021, which was itself a record for the industry.

We reached out to a range of analysts to discuss the implications of all the mergers that took place in January, and they were as shocked as the rest of the industry.

"The carousel keeps turning, and I believe we are definitely not even in the final stage yet," Kantan Games' Dr. Serkan Toto tells us.

Toto explains further that with regards to the recent mergers, platform holders such as Sony and Microsoft target the top of the market, whereas other companies such as Embracer focus on smaller and mid sized gaming studios. "Which leads to the industry overall getting squeezed from both sides," Toto says.

Piers Harding-Rolls of Ampere Analysis sees the mergers of the past month to be good for multiple parties. He tells us that it's been positive for investors, independent studios that are happy to exit at strong valuations, and for the valuations of game companies that already have content portfolios and talent.

"I think excessive consolidation (and we're not there yet) impacts the ability of smaller independent publishers and developers to compete in the long term"

Piers Harding-Rolls

"I think excessive consolidation (and we're not there yet) impacts the ability of smaller independent publishers and developers to compete in the long term," Harding-Rolls says.

"You could argue that Microsoft's big