“We Are Not at All Finished”
In the last fiscal year alone, which ended in March, Sony Interactive Entertainment (SIE) has acquired five gaming studios including Housemarque, Nixxes Software, Firesprite, Valkyrie and Bluepoint; and has pending deals for Haven Studios and a $3.6 billion deal for Bungie.
But according to SIE CEO, Jim Ryan, the company is not done.
“We’ve been extremely active in the area of M&A and investment. The purpose of these investments is to increase our core strength at PlayStation Studios, but also to acquire expertise in areas of game development where historically we have not had a significant presence”, Ryan said.
In order for SEI to reach its goal of having half its titles released on PC and Mobile, Ryan said additional acquisitions are likely necessary.
“New IP is the lifeblood of all entertainment. In terms of future M&A activity, the answer to that is we are not at all finished with our strategy of trying to grow PlayStation Studios inorganically…
“And to the extent that potential targets fit with our strategy, to the extent that potential targets allow us to accelerate the way in which we are able to deliver on our strategy, we will certainly consider farther M&A activity to add to our business portfolio.”
The biggest gaming companies have been on a shopping spree over the last two+ years. More deals have occurred (in dollar value) in the past 24 months than perhaps the previous ten years combined…
And it doesn’t seem to be slowing down anytime soon.
Last year, a record $85 billion in industry deals happened. It’s now expected that 2022 will smash that record (it already has) to the tune of $150 billion in mergers, acquisitions, IPOs, financing, and direct private investment.
With this massive consolidation occurring in the industry, it may be wise for individual retail (and private placement) investors to examine possible buyout targets.
If bidding wars for unique IP owning gaming companies occur, the potential for huge premiums paid to early investors could be rather high.
Regardless of M&A, however, the industry is strong and still growing.