Game developer

Sony buys ‘Destiny’ developer Bungie for $3.6 billion

(Bloomberg) – Sony Group Corp. buys Bungie Inc., the American video game developer behind the popular Destiny and Halo franchises, for $3.6 billion to bolster its stable of game-creating studios.

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The deal announced Monday by Sony Interactive Entertainment is the third major video game acquisition this month, following Microsoft Corp. of Activision Blizzard Inc. for $69 billion two weeks ago and Take Two Interactive Corp., mobile gaming leader Zynga Inc. Buying Bungie will give Sony one of the first-person shooters the most popular to rival the huge Call of Duty series, which Sony’s main rival now owns through Activision.

Shares of Sony rose 2.6% in Tokyo on Tuesday morning.

Microsoft has committed to releasing at least the next three Call of Duty games on Sony’s PlayStation, Bloomberg News reported. But eventually, Microsoft may decide to stream the series exclusively on its Xbox console and Windows computers. Sony, meanwhile, has made it clear that Destiny 2 and other titles won’t be going to PlayStation platforms only.

“This acquisition will give SIE access to Bungie’s world-class approach to live gaming services and technology expertise, furthering SIE’s vision to reach billions of gamers,” Sony said in a statement. the press release. Bungie will continue to operate independently, “maintaining the ability to self-publish and reach players wherever they choose to play.”

Sony is a regular acquirer of video game studios, although Bungie is by far the biggest of the past decade. The Japanese entertainment and tech giant typically buys less established studios and enhances them with marketing and development resources, as it did for Naughty Dog and Guerrilla Games. Sony also has minority stakes in some major game companies, such as Epic Games Inc., the maker of Fortnite. Sony has made a few smaller acquisitions in recent years, including Burbank, Calif.-based Insomniac Games in 2019 and Finland’s Housemarque, in an effort to bolster its library of PlayStation exclusives.

While Microsoft has been focused on packing its subscription service, Xbox Game Pass, full of games big and small, Sony’s plan is to develop big blockbusters and keep them exclusive to PlayStation – a strategy that helped the PlayStation 4 sell over 116 million units, well ahead of Xbox.

“We have entered a major arms race for gaming content as streaming appears to be dramatically changing the business model of gaming and we believe this is a competition Sony simply cannot win given its financial resources. limited,” said Amir Anvarzadeh of Asymmetric Advisors after the announcement. . “We also have little doubt now that Sony is set to launch its own comprehensive streaming service to combat Microsoft’s reportedly money-losing Game Pass. All of this strongly supports the idea that for Sony, the PS5 era is expected to prove far less profitable than the previous generation.

Founded in 1991, Bungie helped put Xbox on the map. Microsoft paid around $30 million to acquire the studio when it was primarily a Mac game developer working on a computer game project called Halo. The game became the staple of Microsoft’s Xbox consoles and has generated over $6 billion in sales, not including the latest installment, which became available last holiday season.

In 2007, Bungie negotiated its independence and parted ways with Microsoft to work on its next big project, Destiny, with Activision. This relationship ended in 2019, and Bungie began to self-publish and operate Destiny independently. Based in Bellevue, Washington, Bungie has more than 900 employees.

Destiny operates differently from many other franchises. Rather than releasing a regular cadence of sequels, Bungie has decided to continue mining and developing the most recent game, Destiny 2. The base game is free to play, while Bungie regularly releases expansions and season passes full of new content. The move has been popular, attracting more than 20 million players since 2019, according to Bungie.

After the deal closes, Bungie will be an independent subsidiary of Sony Interactive Entertainment, led by current Bungie CEO Pete Parsons. The transaction price includes employee incentives and is subject to customary working capital and other adjustments, Sony said. PJT Partners Inc. served as financial advisor to Sony.

(Updates to add a financial advisor in the last paragraph.)

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