Sony Strikes Back with Bungie Acquisition: What the Deal Means for Gaming

Sony, the maker of the PlayStation console, announced that it had agreed on a deal to buy the games developer Bungie for a fee of $3.6 billion.

The move comes just a couple of weeks after Microsoft agreed to buy Activision Blizzard for close to $70 billion. As reported here on see news, Microsoft’s acquisition of Activision caused Sony’s share price to slide, with almost $20 billion wiped off the company's market value.

While the Bungie acquisition is not as eye-catching as the deal Microsoft made for Activision, it does throw into focus the growing consensus that the makers of the Xbox and PlayStation consoles believe that content, i.e., having a library of games, is the key to future success in the ultra-competitive gaming sector. Activision gives Microsoft ownership of top titles like Call of Duty, Overwatch, and Candy Crush, whereas Bungie is the developer of the Halo and Destiny series. In a twist of irony, Halo was for a long time the flagship game on Xbox, but it is now in the hands of its rival, PlayStation.

Xbox chief rules out more console exclusives

We should make clear that both Sony and Microsoft have been at pains to stress that the gaming market will remain open. That is to say that the companies won’t increase the number of console exclusives, which are games that are only available on a specific console. For instance, Xbox CEO Phil Spencer made a statement last week to assure PlayStation players that Call of Duty would remain available to them despite Xbox’s parent company now owning the rights to the game.

And yet, the moves by both Sony and Microsoft seem to suggest we will one day reach a time when consoles or not important at all. Phil Spencer has been particularly vocal about this, claiming that Xbox believes in “gaming for everyone”, hinting that expensive consoles should not be a requisite for accessing the world’s best games.

The consensus among experts is that we will move towards a Netflix model, where everything is on-demand. You can already see this in the way online casinos operate. If we were to take a top site like Genesis casino in Canada, you’d see it hosts games from all the top games developers like NetEnt, Microgaming, Pragmatic, and others. The games are accessed on any device – mobile, laptop, PC, tablet – and the experience remains (almost) the same. That’s the likely endpoint for video gaming.

Indeed, this move to access-anywhere gaming has been bolstered by the roll-out of 5G and better internet services in many countries. The point is that the connection and the content, not the hardware, are the important factors. Xbox has already begun to push this with Xbox Game Pass. Sony and Nintendo also have their versions, but they are expected to grow in scope.

Moreover, you might have seen that Netflix is moving into gaming. A few games have already been released for Netflix subscribers, and it is expected to be a slow process for Netflix to become known as a gaming provider, but the company fully expects to be rivaling PlayStation and Xbox in the coming years. As you might expect, given Netflix’s business model, there are no plans to release hardware for gaming.

For the moment, though, gamers will be keeping an eye on what Sony and Microsoft do next. The recent moves were seen as something of a power grab. And while the statements from these companies have been amicable, even encouraging for gamers, it is worth remembering that Sony and Microsoft are rivals. It’s a case of watching this space.