This week, Sony got into the acquisition game by purchasing Destiny 2 developer Bungie for $3.6 billion. It’s not as much as Microsoft’s $7.5 billion purchase of Bethesda, and barely a fraction of their $70 billion purchase of Activision Blizzard last month. And yet some are saying Sony overpaid all the same.
A fierce critic of this deal has been Wedbush analyst Michael Pachter, who believes Sony “vastly overpaid” for Bungie, and that the deal doesn’t make sense and is a sign of “desperation” for Sony, who is spooked by Microsoft acquisitions.
His arguments:
- Sony paid around $4 million per developer when these deals are usually far less per worker than that.
- Sony paid $3.6 billion for Bungie when other developers like Respawn and Insomniac have been purchased for mere hundreds of millions, and generate more profit.
I get what he’s saying, but I don’t agree, and I think he’s being a bit short-sighted here.
I will agree that $3.6 billion is a premium for Bungie, especially when you consider as of right now, they only have a single game out, Destiny 2, and that game, and future Bungie games, are not going to be PlayStation exclusive as a result of this deal. However, the market has changed since even a few years ago when those other purchases were made, and we’re essentially seeing a talent gold rush in the space, and I’m not surprised to see prices rise as a result.
On top of that, this move feels very forward thinking for a Sony who has started to come around to an uncomfortable idea of the future that cannot just involve them selling very highly praised single player action games for a line of physical boxes. This generation in particular, Sony has realized how literally they are being limited by their own consoles, as they cannot make anywhere close to enough of them to meet demand. On top of that, they’re watching earnings report after earnings report where the biggest peace of revenue pie is not game sales, but live service/microtransaction earnings.
You cannot view Sony as simply having bought Bungie and the Destiny IP and whatever future games they’ve made. They have bought one of the most talented live service studios in the industry, where they have said explicitly they will be relying on Bungie to help train their other studios in how to succeed in that space. They also understand that they may have to let go of the idea of PlayStation console exclusivity to a certain extent, as they embrace more PC releases, and in allowing Destiny to remain multiplatform after purchase, they’re essentially doing what Microsoft did when they bought Minecraft.
I think this was a smart acquisition for Sony, who does not really need more big studios making exclusive games for PlayStations they literally already cannot sell enough of. They need to work on their distribution of games they own and the type of games they make, and Bungie can help in both of those ways.
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