4 ms·
It feels the opposite way to me. Microsoft bought a company with an extensive suite of IP that publishes a lot of games. Sony panicked and bought a company that
by mdasen 5y ago
It feels the opposite way to me. Microsoft bought a company with an extensive suite of IP that publishes a lot of games. Sony panicked and bought a company that has one franchise (Destiny).
When looking at Disney, I see a company that has bought a lot of deep IP catalogues. They've used that to really propel their future and get high-value talent that wants to work in those universes with a Disney-sized budget to tell their stories.
Activision Blizzard may have cost 20x more, but Activision is really profitable with a P/E ratio of 26 (at the $69B deal price). Microsoft's P/E is 33, Google's is 26, Apple's is 29, Amazon's is 58, and Netflix is 38 (even with the tumble in price). So Microsoft bought Activision relatively cheap compared to its earnings. Bungie is private so we don't really know what their finances are like. Activision's cheap price means that there isn't a lot of risk for Microsoft. Maybe you believe that Activision is about to crater and no one will want their games in the future. It's possible. It's also possible that everyone is going to get tired of the extensive IP catalogues that Disney has assembled. However, when the price is that reasonable, you don't need the same explosive growth to justify the investment.
So Microsoft bought a business that even if it just keeps performing as-usual will be a fine addition to Microsoft. It also has the potential to be huge for Microsoft with a deep IP catalogue, the potential for Xbox exclusives to help launch the next-gen Xbox when the time comes, the potential for cost savings with Azure infrastructure, and probably more that I'm not thinking of.
If Sony buys Bungie and just lets them do their thing, they might get some good games. But it seems like Microsoft wants to buy and pour some money in which seems like a recipe for bigger successes. We've seen it with some of Microsoft's recent purchases. They've poured money into GitHub and made it an even bigger platform. They've poured money into .NET Core and Xamarin/Mono to recapture developer mindshare. It seems like Microsoft is likely to take similar steps with their Activision purchase - and similar steps that Disney has taken with their IP catalogue.
It's possible that the small places Sony has bought have better potential, but Activision Blizard is a profitable company at a relatively cheap price which means that the purchase carries relatively low risk while still offering a lot of upside for Microsoft.
- sensitivefrost 5y ago"Sony panicked and bought a company that has one franchise (Destiny)." If you think Sony turned around and bought Bungie in the 2 weeks since the Acti-Blizz acquisition was announced, I dunno what to tell you.
- Macha 5y agoOn the flip side, it's highly unlikely that Sony didn't know talks were ongoing for ActiBlizz, and may even have been offered a chance at the same.
- ezekg 5y agoDefinitely. Especially considering they had (timed) exclusivity of all COD content for years.
- mardifoufs 5y agoI don't think Sony could afford Activision. Its own market cap is 133b$ USD, which is a lot, but it would still have ended up being a very high-risk buy/merger. I'd be surprised if they ever had any acquisition talks. Activision is so big that only titans like MSFT could afford to buy them outright.
- steveklabnik 5y ago> Sony panicked and bought a company that has one franchise (Destiny). Beyond the fact that this has supposedly been in the works for months, so not exactly a panic, Bungie has a new IP in development, and has announced their plan to expand Destiny beyond video games, to movies, books, and other media. So while you're right in the sense that today, Bungie only has Destiny, they've already been working on making that not true, even if they're not there just yet.
- AussieWog93 5y agoHonestly, I'm not sure if Activision's IP catalog would attract and retain high-value talent in the same way that Disney's does. Yes, the catalogue is deep, but much of it consists of dead horses that have been beaten for years or once-great icons that were mismanaged into relative irrelevance. Budget constraints didn't seem to be what was holding them back before, and I can't see Microsoft suddenly managing the IP any better than Activision were (if anything, I can see it going downhill faster).
- fomine3 5y agoDisney is a really outlier. Their IP is extremely important so they can extend copyright length.
- Godel_unicode 5y agoI'm honestly really excited about Microsoft using their proven history of remastering games (Halo, AoE) and applying it to that exact list of once-great icons. At this point all they need to do to gain a ton of goodwill is roll WoW into gamepass so it's not yet another subscription and fix the Warcraft remaster. Those along with not clogging up the candy crush money printer will get them plenty of runway to really dig in and fix the culture.
- mrgordon 5y agoI’d be surprised if they touch the WoW cash cow and make it free with Game Pass. It would be a bold move
- skocznymroczny 5y agoPerhaps they could roll something like WoW Classic into game pass, but leave retail unchecked.
- trinovantes 5y agoGiven how well they treated the Age of Empires community, I'm optimistic they'll do something for Warcraft/Starcraft in the coming years Not to mention these are lore-rich well-known universes and could result in multimedia franchises
- SketchySeaBeast 5y agoThey also get neat tech with the purchase - the blizzard launcher is awesome. As far as smooth downloads/deployments/go-lives are concerned that launcher and the games its services are in leagues of their own, so far beyond Microsofts own store it's not even funny (ignoring the recent problem of Diablo 2 running twenty year old net code causing problems with its recent launch).
- ouid 5y agoAdditionally, most of the arguments about AB dying in the near future have little to do wiht the thing that MS actually bought, which is IP, and everything to do with how AB as a company has handled that IP. If you think Microsoft is better at not mis-handling IP than Activision-Blizzard is, then you should assume that the acquisition of that intellectual property at the market price of the company (which as you mention was not a highly speculative thing), is a very good deal for Microsoft. That said, I've never played the Microsoft version of Minecraft because it seems strictly worse, and also unmoddable.
- 015a 5y agoI think there's a misunderstanding of my comment; I am not asserting that the AB purchase was bad for Microsoft. Just that this Sony/Bungie purchase will be better for Sony than AB will be for Microsoft. Both platforms will see success with their recent acquisitions. One thing I'd add, in short: Its easier to 10x a small company than a large company. Applied here; Destiny is a fantastic launchpad, but many in the community would agree that its potential was always short of being fully realized. With additional funding, talent, and leadership; its reasonable to conclude that PlayStation could be a very positive force on the game (for everyone who isn't an Xbox gamer, of course, sadly). There's a lot of room to improve this product, which is already relatively good; many untapped players. In comparison, AB is something of a... well, I don't want to say "disaster", because there are some great parts to that company, but they're having major issues. Even putting the sexual assault scandal aside: There's much less of a launchpad for Xbox to start from and add value. We're talking ten thousand employees, across dozens of product lines, and maybe three of them have a strong future outlook. They're looking at a years-long phase of cleaning shop, reorganizing, firing, hiring, planning new projects, cancelling bad ones, it's going to be dirty, and in none of that is "releasing awesome games to players". But, maybe there's a light at the end; I really, really hope so, and believe there will be. And all of this is if the acquisition goes through. There's a real possibility it'll be shut down. Sony "sneaking in" this much smaller Bungie acquisition at the same time basically guarantees it'll go through; the USG/EU won't block both. And frankly, I don't believe they'll block either, but its still a possibility.