Sony Interactive Entertainment will acquire Bungie Inc, the original creator of the "Halo" videogame and developer of "Destiny", in a deal valued at $3.6 billion, making it the latest in a wave of consolidations sweeping the gaming sector.
Bungie will join Sony's PlayStation family, the U.S. company said in a blog post, as the Japanese conglomerate strengthens its network of in-house gaming studios behind hits such as "Spider-Man" to take on cash-rich rivals.
One of Sony's Biggest-ever Acquisitions
Microsoft Corp, whose XBox consoles have long lagged Sony's PlayStation in sales, pitched a whopping $69 billion for "Call of Duty" maker Activision Blizzard earlier in January.
"While this is one of Sony's biggest-ever acquisitions, the amount paid by Microsoft puts into context the heavy competition faced in this sector," said Piers Harding-Rolls, gaming analyst at Ampere Analysis.
Bellevue, Washington-based Bungie, which was owned by Microsoft before going private in 2007, had worked on the "Halo" videogame series when it was under the software giant. It has also worked on titles including "Marathon" and "Myth".
Bungie now plans to hire more talent across the studio for "Destiny 2," a videogame previously published by Activision Blizzard.
The video game space is consolidating rapidly to tap a surge in demand created by the pandemic, with new deals blurring the line between PC and mobile gaming companies as these firms hunt for new revenue streams.
The sector is on course for a new record of $150 billion in deals, financing and IPOs this year, according https://www.reuters.com/technology/red-hot-gaming-market-breach-150-billion-deals-fundraising-report-2022-01-31 to investment banking firm Drake Star Partners.
In yet another mega deal in just the first month of the year, "Grand Theft Auto" maker Take-Two bid $11 billion for "FarmVille" maker Zynga.
Big-name companies have also been trying to bring talent and intellectual property behind popular titles in-house rather than partnering with studios, giving them more access in a growing, high-value market.
Sony has added a number of developers, including videogame development studio Valkyrie Entertainment and "Returnal" developer Housemarque, under its umbrella.
"This (Bungie deal) is an important step in our strategy to expand the reach of PlayStation to a much wider audience," said Jim Ryan, head of the Sony Corp unit responsible for PlayStation.
Bungie will be an independent unit of Sony Interactive Entertainment, run by its board chaired by CEO Pete Parsons.