Yesterday, Microsoft announced that it is acquiring Activision Blizzard for $68.7 billion. Less than 24 hours later, this has already caused rival company Sony’s market value to plummet by a whopping $20 billion.
The news comes from a recently filed
Bloomberg report, which states that Sony Group Corp. saw its shares fall by 13% yesterday, Wednesday, Jan. 18. This marks the company’s biggest drop since Oct. 2008.
To put this into perspective, Microsoft’s acquisition of Activision Blizzard has knocked $20 billion off of Sony’s market value in a single day. According to Bloomberg, games and network services account for approximately 30% of Sony’s revenue. Microsoft, meanwhile, earns the majority of its money elsewhere, which is part of why this titanic purchase has had such a massive, instantly pronounced effect on its rival. It has also been alleged that only
“some” Activision Blizzard games will be available on PS5.
The acquisition is no doubt intended to bolster Microsoft’s Game Pass service for Xbox consoles, which allows subscribers to access a vast library of games in exchange for a monthly fee. After the company’s acquisition of Bethesda and its subsidiaries earlier this year led to iconic titles such as
The Elder Scrolls,
Fallout, and
Doom becoming available via the service, the possibility of behemoth video game series like
Call of Duty following a similar trajectory is likely, especially given that the service recently
surpassed 25 million global users.
That’s not to say the acquisition is all good for Microsoft. Activision Blizzard is currently facing widespread allegations of harassment within the company, with both
employees and
shareholders having called for CEO Bobby Kotick’s resignation in recent months. Activision Blizzard workers have also staged
walkouts and
strikes in retaliation against layoffs and inaction.