Video Games Tutorials and News - Game Theory: Will Disney Buy Nintendo. Video Game Acquisitions
Ladies and gentlemen. While we were all distracted by robot children and argees. Microsoft went and pulled off the biggest acquisition in gaming history, buying out Activision Blizzard for 68.7 billion dollars. But it certainly wasn't a first for Microsoft. They picked up Minecraft developer Mojang back in 2014 for two and a half billion and Bethesda just last year for seven and a half billion, but you know those numbers are just a wee bit less than 68.7.
And while this number certainly seems crazy high, just look at the stacked deck that they just picked up. Microsoft is now in control of the fishing derby, master of lamps freaking alcazar, the forgotten fortress, and a few other things that are thrown in here too, like Warcraft. Call of Duty Overwatch.
Hearthstone, and Candy Crush. Yeah, and Candy Crush is a game that you probably don't care a whole lot about, but investors certainly do, considering it makes a billion dollars a year alone. Yeah, there was also Crash Bandicoot and Spyro the Dragon, who were the literal mascots for the Sony PlayStation.
Back in the day, it'd be like if Sega bought Nintendo. They just put Mario on their console anyway. Seeing that their favorite marsupial had just gotten scooped up, Sony played an uno reverse card and bought Bungie, the creators and former developers of Xbox's Star Series Halo. So, with all this consolidation in the article game space, who's next?
ubisoft being bought by Val, Sega being nabbed by Nintendo, Konami being bought by nah, no one wants them or do they? Everyone is focused on article games, but the real game at play here is so much bigger. Hello internet Welcome to Game Theory, the show that's worth its weight in gold, which considering the whole thing exists online, therefore has no measurable weight, thereby equating to zero dollars.
This week I'm taking a bit of a break from article game lord to talk about the lore of real life, and man, the console wars look a lot different than they did back when I was a kid. Up till now, the PS5 has been destroying the Xbox as far as exclusive games go, but instead of working to release more exclusives.
Microsoft just decided to buy one of the publishers for those PS5 exclusives. Bethesda. And in one of the greatest anime betrayals of all time, now not only does Microsoft own the future of all Bethesda's in-house titles like The Elder Scrolls and Fallout but also franchises like Doom. Wolfenstein, and The Evil Within, and they weren't done like a kid who just got his report card money.
They wanted to buy more. So in January, they announced a deal to acquire Activision Blizzard for that huge 68.7 billion dollar figure I talked about in the opening, and can I just say this, when news of that deal first broke. I saw headline after headline, saying that they had bought Activision for nearly 70 billion dollars.
nearly 70 billion dollars Come on, you are writing for the internet. 68.7 billion If you're going to round up, you round up to 69.6. You're writing for the internet. You have some taste in speaking of nice things. You won't be disappointed, or you know, maybe you will. I get mixed feedback sometimes.
Needless to say, it's been fascinating and a little scary watching all this play out. As statements have now been made by various game developers about whether they would or would not be interested in being acquired or doing some acquiring, from little companies all the way up to big players like Nintendo, the question is who's going to be the next big acquisition, and who's going to get them.
As someone who spent the last decade observing trends in this industry. I'm going to make some predictions as to where all of this is headed because of who gets acquired by whom and does the acquiring. The answer is likely going to surprise you, so let's start with who our next buyer is most likely to be.
The obvious choice is Sony. Right, according to PlayStation's CEO, Jim Ryan. Sony has many more moves to make, so it'd be foolish to not consider them as a front-runner for the next big acquisition. At the end of 2021, Sony had 65 billion dollars in total capital, with 19 billion being cash, so they definitely have some money to spend in the market.
Just to put that number in perspective, around the same time. Microsoft had 125 billion dollars in cash alone, so you know, comparing Sony and Microsoft in this arena is like comparing apples and oranges. They are ten times bigger. Another large company in the space with eyes on it is Tencent. With a Chinese-based company that owns massive giants like Riot Games, creator of League of Legends, as well as mobile megastar Supercell, with their games Clash of Clans and Brawl Stars, with 143 billion dollars in total capital, they could easily swoop in and buy someone just to keep themselves competitive.
The biggest issue with them, though, is that they're a Chinese company. As such, 10 cents would likely face an uphill battle both legally and culturally trying to buy anything that wasn't made by an eastern-based company. Could they do it? Sure, absolutely there's just a lot more red tape and it's going to take a lot longer for eastern companies.
There's also the plumber-shaped elephant in the room. Nintendo, with all this back and forth about Microsoft versus Sony Where's Nintendo? Well, considering Nintendo is currently sitting on 16.4 billion dollars in total capital with 14 billion in cash reserve, I'd say that they could afford someone.
Square Enix is valued at about 4.4 billion dollars. Sega at 3.3, Any of these could be a solid pickup, but the key there is if Nintendo. In February of 2022. Nintendo's president said that, quote, having a large number of people who don't possess Nintendo DNA in our group would not be a plus to the company, so it really looks like they're not in the market and honestly, that is where I see most online discussion.
To this end, they focus on some of the biggest names in article games, and then they just stop. They should probably include Epic in that list, but you know, that's not the point I'm trying to make. The point is that if these are the sorts of names you're thinking about as the next big buyers, then you are thinking In a way, too small a world has shifted.
This is no longer just about article games. This is about so many bigger plays. In order to understand who is going to pick up the next company, we have to truly understand the why of buying a article game developer and publisher in the first place. It used to be that article games, movies, TV shows, and books were just competing within categories to be the best in their respective fields of competition.
