Sony tumbled on the Tokyo Stock Exchange on Wednesday, January 19, following the announcement the day before of the acquisition by Microsoft – its rival in the video game sector – of the publisher Activision Blizzard for a record amount. The action of the Japanese company unscrewed 12.78% at the close, its worst fall in a session since October 2008, losing in passing some 20 billion dollars in market capitalization.
If it materializes, the proposed takeover of Activision Blizzard by Microsoft, for 68.7 billion dollars, could be very bad news for the Japanese giant. Because Activision’s vast catalog of games would allow Microsoft to considerably enrich its Xbox Game Pass monthly subscription service or even to make certain titles exclusive to its Xbox consoles, at the expense of Sony’s PlayStation 5 in particular.
“The headwinds are going to get more violent for Sony,” commented Amir Anvardazeh on Wednesday, in a note from Asymmetric Advisors. This transaction “removes any doubt as to the intentions (of Microsoft) to take a new step in the battle of the consoles”.
Difficulty competing to acquire popular game franchises
“Sony is going to have a hard time competing with Microsoft” when it comes to “the money it can spend on acquiring popular game franchises,” said Kazunori Ito of Morningstar Research.
The fall in the action of the Japanese group “shows that investors fear that Sony cannot stay ahead” if the industry becomes less centered on the consoles themselves, added Kazunori Ito, quoted by the Bloomberg agency.
Microsoft’s announcement, on the other hand, brought to the Tokyo Stock Exchange the values of Japanese video game publishers with a large portfolio of titles: Capcom jumped by 4.56% and Square Enix by 3.72%, Konami gaining for its part 1.72%. Nintendo, both console maker and game publisher, limited its losses, shedding 0.22% as the Nikkei index fell 2.8%.
In France, the publisher Ubisoft took off following this takeover, its share showing a gain of 11.87% on Tuesday, at the close of the Paris Stock Exchange.