Microsoft is flashing its wealth to beef up its gaming portfolio. This all adds up to a terrifying boss battle for Sony, Microsoft’s video game system competitor.
Sony’s stock dropped 12.8 percent on Wednesday, the worst in a single day since 2008. The Activision acquisition, which would be Microsoft’s largest, is a clear indication of the Xbox maker’s desire to spend more on high-quality video game content.
The deal would help Microsoft expand its gaming portfolio, particularly in what are known as AAA games, such as “Call of Duty.” Last year, the technological behemoth finalized the $7.5 billion acquisition of ZeniMax Media, the creators of iconic video game titles such as “Doom” and “Fallout.”
“Sony will face a massive task in standing alone in this war of attrition,” shared Asymmetric Advisor, Amir Anvarzadeh with Business Standard. “With Call of Duty set to be added to the Game Pass roster exclusively, Sony’s problems are only going to grow worse,” he further added.
SEE ALSO: Microsoft Set To Acquire Activision Blizzard In A Blockbuster $68.7 Billion Deal
The main concern for Sony investors is how the massive transaction would affect the whole video game industry. In the console battle, Sony had been ahead of Microsoft. More gamers may gravitate toward Xbox if the content catalog improves. Microsoft’s goals aren’t limited to consoles. Xbox Game Pass, the company’s Netflix-style subscription program, has more than 25 million customers.
The cloud-based service is available on personal computers and allows users to stream games to mobile devices. The Activision partnership may help the service attract players across all platforms. With top-grossing products like “Candy Crush Saga” and “Call of Duty: Mobile,” Activision has a significant presence in mobile games. However, Sony should proceed with caution, since it will not be able to compete with Microsoft just based on financial strength. According to S&P Global Market Intelligence, Microsoft’s operating profit is around eight times that of Sony.
Sony has to keep beefing up its content, but instead of mega giants like Activision, it should focus on buying and working with smaller, independent gaming firms.
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