“Families are always rising and falling in America,” 18th-century writer Nathanial Hawthorne once wrote. Had he lived for another few hundred years he would have known that the same is true about the stocks. Following the announcement on the part of Microsoft that they will be acquiring video game publisher Activision Blizzard for $70 Billion dollars, stock for their primary competitor in Sony has taken a significant hit.
According to a detailed report from Bloomberg, Sony Group Corp. shares have reportedly fallen by %13 in Tokyo on Wednesday, indicating a roughly $20 billion dollar decrease all total. In America, their stocks have also dropped by roughly %4. Both of these downward trends directly follow Microsoft’s news of the acquisition.
With the closing of this deal, most likely to occur in 2023 if regulators give the all-clear, Microsoft will now own major franchises such as Diablo, Overwatch, and the powerhouse franchise Call of Duty to name a few. Due to the size of this acquisition, and the selling power of what they are buying, it is no wonder that this purchase dwarfed their previous acquisition of Zenimax, which we all thought was major at $7.5 Billion.
In recent years Call of Duty, and by extension Activision, have shared a positive relationship with Sony through a partnership for the game, with Call of Duty: Vanguard being the second highest-grossing game on PlayStation in 2021. While much speculation over whether the franchise will become exclusive for Microsoft, with vague statements made so far, PlayStation has maintained a significant amount of the fanbase for the game over the years.
On the converse side, Call of Duty is poised to significantly increase subscribers to Microsoft’s Game Pass service. Last year the service subscriptions had slowed, though Phil Spencer announced the service had hit 25 Million subscribers. The news that they were purchasing Activision Blizzard was accompanied by the news that they planned to put “as many Activision Blizzard games as we can within Xbox Game Pass and PC Game Pass.”
With all the uncertainty in the air, it is not a shock that Sony stocks and Share Prices have taken a hit, this is often the case with major moves like this. There are plenty of things that could happen in a year that could cause their stock to readjust.
The two things to follow after this news are regulators investigating this deal, with multiple antitrust laws being overhauled in the wake of this news, and if Sony will make any big move in response. Both Sony and Microsoft have lost market positioning to Chinese Holding Company Tencent, placing more importance on moves like these.