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Acquisitions in the Gaming Industry - Discussion, Evaluation and Predictions

Tokuiten

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I used the search function, but couldn't find a similar thread, so I hope this one is okay. Anyway.

With all the continued acquistions happening in the gaming industry, I thought it'd be good to have a general thread to discuss the greater connections and consequences. What do you think about acquistions in general, what do you expect to happen in the future? How do you judge the consequences for you personally as well as for the industry?

As I said before, I feel more confident now that Sony acquiring SE might be more than just a "fun" thought of mine. Not that this would be enough to answer the current push made by MS buying Activision-Blizzard, but Sony surely must feel the need to do something, whatever that will be. Unlike many, I also expect Nintendo to actually react to this current situation. So far they've been slowly building up their staff numbers, currently focusing on the new building that has a larger staff capacity. But this conservative growth is too slow in a world where big corporations can just buy up the market on a whim from one day to the next. However, I don't see Nintendo going for any of the big Japanese publishers, so no Capcom, Sega or Banda Namco (the latter I could see if Nintendo ever felt gravely threatened, but we're far from that point). The ideal choice for Nintendo imo would be Koei-Tecmo. Not only do they have plenty of traditional franchises that'd fit great into Nintendo's echelon of characters, but also would the Musou-games be the perfect vehicle to function as holdovers between the release of their big franchises', satisfying fan-demand. A Zelda- or Xenoblade-game will always take about 5 years, but with the relatively quickly made Musou-principle, you could always put a Zelda Musou or Xenoblade Musou in there for relatively low budgets.

But beyoned Sony and Nintendo, I feel like the gaming industry, at least the traditional one as well as its fans (us) are experiencing a "Dark World"-moment right now. You know, where the player realizes that those first three dungeons were only the prologue of the game and the real adventure is now about to begin. Ideally, all this consolidation wouldn't happen, but as someone who's stopped caring about where I play my games as long as the games I get are great, it's pretty damn exciting to see all this happen.
 
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EDIT: Going to remove the post before it causes any future potential issues, but TL;DR, may be related to the individuals podcast, but it caused a lot of notable people that knew him to even kinda have an initial reaction/scare.
 
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Related...





I really really do NOT like this tweet. Sounds really ominous.

"We'd also like to announce that Microsoft has ALSO bought out Nintendo, please understand."

iwata-please-understand.gif
 
I don't think acquisitions are universally bad, consolidation is a natural part of the business cycle and it's less of a deathblow in the entertainment industry. They provide pressure for other platform holders to make changes whether its bolstering their own development efforts or cultivating/nurturing up-and-coming development teams / projects. Admittedly, it'll be a slow process.
 
I don't think acquisitions are universally bad, consolidation is a natural part of the business cycle and it's less of a deathblow in the entertainment industry. They provide pressure for other platform holders to make changes whether its bolstering their own development efforts or cultivating/nurturing up-and-coming development teams / projects. Admittedly, it'll be a slow process.
Thats a ...take.
Yeah offset that 70 billion investment we just made by hiring hundred more developers this year.

Your post would make more sense when talking about what MS did initially when they bought development studios, not just straight up buying the biggest 3rdParty publishers. Thats not something you can offset, no matter how much you nurture or even buying other publishers.
 
I don't see anything happening here that would pressure Nintendo into purchasing outside companies who aren't already development partners

Nintendo is, again, classically conservative, preferring to stay at just the right size, declining to expand too quickly. They'd sooner invest in development partners than buy them. We're not going to see them buy Sega or Capcom, no, not even these twenty years after those rumors initially started
 
"We'd also like to announce that Microsoft has ALSO bought out Nintendo, please understand."

iwata-please-understand.gif

Damn, on one hand, I want this to happen so my inner child explodes.

On the other hand, I do not want this to happen, otherwise their game quality they are known for for 50 years will drop.
 
Nintendo will only acquire a close development partner if they are open to selling ala Next Level Games.
Yes, the focus would be development studios not whole ass publishers that make most of their money from being on multiple plattforms.
 
Thats a ...take.
Yeah offset that 70 billion investment we just made by hiring hundred more developers this year.

Your post would make more sense when talking about what MS did initially when they bought development studios, not just straight up buying the biggest 3rdParty publishers. Thats not something you can offset, no matter how much you nurture or even buying other publishers.
Well yeah, I know everyone AB thing is on everyone's mind right now, but we already have a separate thread one for that. This thread is specifically geared towards acquisitions in general as per the OP. The first paragraph asks what we think about acquisitions in general. Maybe you should read that before saying my post doesn't make sense. I never suggested they'd offset 70 billion this year, that's ridiculous.
 
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I think Nintendo buys Mercury Steam. Would help them expand their European talent pool and would help make it more reflective of Nintendo's values (no crunch).
 
I think Nintendo buys Mercury Steam. Would help them expand their European talent pool and would help make it more reflective of Nintendo's values (no crunch).

Nordik Games purchased parts of Mercury Steam, not happening.

As an addendum:

I find the speculation and especially rooting for large-scale corporate acquisitions to be distasteful

Same, I don't like the poll of the thread kind of championing that.
 
A perfect company for Nintendo is Sega.
Owns bayonetta.persona,sonic etc.
Others that might be a possibility:
Capcom for MH. Bandai is too big that i don;t think they can justify the cost.Konami maybe.
 
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As an addendum:

I find the speculation and especially rooting for large-scale corporate acquisitions to be distasteful
Why? It all happens under the premise that most of us agree that less acquistions are better than more. But acknowledging the reality where acquisitions are an increasingly regular occurrence, it's imo fair to speculate about the future.
 
Well yeah, I know everyone AB thing is on everyone's mind right now, but we already have a separate thread one for that. This thread is specifically geared towards acquisitions in general as per the OP. The first paragraph asks what we think about acquisitions in general. Maybe you should read that before saying my post doesn't make sense. I never suggested they'd offset 70 billion this year, that's ridiculous.
Fair point, i just dont think you can offset acquisitions of that level by nurturing and increasing your own development resources. Just the worth of the IP alone, especially in the gaming space its incredible difficult to compensate for such a loss.
I didnt say your post dont make sense just that in light of the recent news and the OP focusing strictly on big multiplattform publisher with a long gaming history and big catalogs i dont agree with your take since its a very optimistic one.

Like telling other companies to just provide better movies to compete after Disney bought Marvel, Lucas Arts and Fox.
 
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Nordik Games purchased parts of Mercury Steam, not happening.



Same, I don't like the poll of the thread kind of championing that.
Nordisk holds a 40% share. I think Nintendo could work something out to buy out those shares.

I also don't like cheering on mergers and acquisitions.
 
On to the actual topic at hand, I could see Sony trying to make a large headline grabbing acquisition - to try and bolster their support; although I don't think they have the capital or the capacity to make an acquisition close to the scale of Activision-Blizzard. So this means that I don't think it's likely they'd try to buy Take-Two or EA - even if those would be the choices that come to mind.

Square-Enix is actually the kind of company I could see being bought by Sony - even if it is mostly as a PR move and won't be anywhere near as succesful as the AB takeover in terms of denying the competitor games.

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As for Nintendo, their method of keeping ties is to own a share of the company - as they do with Bandai Namco, DeNA, Square-Enix, Konami and Koei-Tecmo. I could see them becoming a bit more involved with this and seeking shares in Sega and Capcom to further cement their connections. MercurySteam as well seems like a good candidate for Nintendo buying a share, if even just to prevent a full buy-out by Nordisk Film.

As for outright buy-outs, Nintendo is conservative in the realm of mergers and acquisitions and so the most likely candidates for a buy-out are the companies already closest to Nintendo - Intelligent Systems, Camelot, Grezzo, HAL Labs, Game Freak etc. - and even then they own stakes in most of these companies already, and none are at risk of being taken away from Nintendo any time soon. I think the only fully external studio Nintendo might jump at the chance to acquire would be PlatinumGames and even then I think that ship sailed when Tencent money got involved in PG.

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Microsoft have obviously proven that they are M&A happy - both in the past with purchases like Rare and Bungie, and in the modern day with the massive purchases of both ZeniMax and Activision-Blizzard. Assuming they don't dig into debt financing to make more buy-outs, they likely have enough juice in the tank to do one more Activision-Blizzard level buy-out, or a whole bunch of smaller ZeniMax-level buy-outs. For Activision-level, there really are only three companies even close to that level. Those companies are Electronic Arts, Take Two Interactive and Nintendo.

Nintendo is almost certainly not happening, both due to the company itself being unwilling to sell and the Japanese government being unlikely to allow it - which leaves the big two US third parties. Take Two feels more likely of the two, and has the lucrative asset of GTA. EA however is the company acquisition that would basically be the equivalent of going for the throat of Sony - when combined with Activision. COD is one of the biggest drivers of PlayStation sales in the US, but is less important relatively in Europe - but taking away FIFA and the other sports licences EA holds, that would make a huge difference in Europe.

Ubisoft is another that you might think of for big western publishers, but if they were gonna be acquired by anyone - they'd've been acquired by Vivendi years ago; but the Guillemont family resisted that hostile takeover attempt and won, so I highly doubt Microsoft would have much better luck there. Other smaller publishers and companies are anyone's guess - Japanese ones are likely to be difficult due to national pride combined with the government being unlikely to allow it, Chinese companies are likely to have a similar issue.

----

Then you have the wild cards - Big Tech (minus Microsoft ofc). One way of interpreting the AB buy-out is as a defensive measure against the other big tech companies to grab a business at an oppurtune time before they can. Apple, Alphabet, Tencent, Amazon, Meta - all are interested in the gaming market and have the same kinda money Microsoft has for throwing around. It might not be a matter of if the other big western publishers get bought up, but when.

Now of course, these kinds of acquisitions have somewhat less bearing on the landscape of gaming - these aren't console manufacturers, and the platforms they do hold seem unlikely to be the kind of places they'd want a company like Take Two or EA to be forced into doing exclusivity for. Apple would only stand to gain more by having GTA or FIFA under their belt on all platforms, as opposed to squirrelled away on iOS as exclusives. Alphabet is similar - although they have two platforms, Android and Stadia. Meta and Amazon are in similar situations as well. Tencent out of all of these is the only one that isn't even a platform holder at all (outside of being the distributor for Switch in the People's Republic) and so doesn't even have a place for any acquired companies to be exclusive to.

----

Anyway that was my 2 cents on the matter, I don't neccesarily know how likely any of this is - but Microsoft has kinda flipped the script on everyone here.
 
If Sega ever gets acquired I just want Team Sonic and the Sonic IP to go to Nintendo
 
Will repost what I said earlier on twitter.

People suggesting Sony buy Capcom/Square Enix/Namco Bandai are silly, most of those Japanese publishers make games that already sell way better on Playstation with many of the biggest ones being exclusive. The only purchase Sony could make to strike back would be EA or Take 2 and I don't think either move is on the cards.

Both Nintendo and Microsoft are in better positions to be disruptive then Sony if they make an aquisition of a Japanese publisher.
 
Take Two and SEGA are probably next. Ubisoft would be a reletively cheaper purchase, but would also come with an absolutely gigantic burn rate attached as a hidden cost; so I think they will be picked up after those two.

Sony can't afford EA, so Take Two are likely to be their big counter to Activision. SEGA have also already split off their console division from the amusement division; basically setting them up perfectly for an aquisition now. The only question here is... who gets them first? Sony, Tencent or Nintendo?

Either way, I suspect that all of the big 4 remaining western publishers (EA, Take Two, Ubisoft, WBIE) will get swallowed up by Microsoft/Sony/Tencent by 2025. The big Japanese publishers will take longer to get swallowed up, but it'll also happen eventually. We're coming to the end of the traditional console industry as we know it; and unless developers can find the ability to appeal to an expanded audience outside of the typical 10-25 male demographic? They have no future outside of the upcoming oligarchy/monopoly.
 
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Fair point, i just dont think you can offset acquisitions of that level by nurturing and increasing your own development resources. Just the worth of the IP alone, especially in the gaming space its incredible difficult to compensate for such a loss.
I didnt say your post dont make sense just that in light of the recent news and the OP focusing strictly on big multiplattform publisher with a long gaming history and big catalogs i dont agree with your take since its a very optimistic one.

Like telling other companies to just provide better movies to compete after Disney bought Marvel, Lucas Arts and Fox.
I don't believe so. Nintendo has a model where they're minimally impacted by this acquisition. As for the movie comparison, I'm entirely sure what point you're trying to make. Should the companies not be trying to provide better movies regardless and leave us with only super hero films and Star Wars? Their goal should be to serve a niche such that they turn a profit while looking for the next thing, which plenty manage to accomplish.

Is Playstation going to get knocked down from being the clear market leader? Probably. Are they going to go bankrupt? No. I think people need to view these things on a longer timeframe. Companies can have large catalogs, but it doesn't mean those IPs stay relevant forever and it doesn't mean that new ones can't take off.
 
How cash on hand does Sony actually have? I read somewhere that they have around 20B, though im not sure. If they do have around that much the best they can go for is probably Ubi or Square, but thats still cutting it close.
 
The ideal choice for Nintendo imo would be Koei-Tecmo.
That would be a waste of capital imo. The only benefit of buying Koei-Tecmo is an increase in Nintendo's game development force. KT has no notable IP that would warrant paying a substantial premium over just purchasing some like TOSE or naturally hiring people.
 
Correct me if I'm wrong, but I think all of the 3rd party studios (excluding huge publishers like Bandai Namco or Koei Tecmo) that Nintendo works closely with (i.e. Intelligent Systems, GameFreak, Good Feel, Indieszero, etc) don't really own any notable IP of their own, right?
 
Nintendo isn't going to be changing any of their plans because of today's news. I can see Sony panic reacting with a purchase of SE or something to that effect but even they would have to realise how pointless that would be when MS could just turn around and make a bigger acquisition.
 
Nintendo isn't going to be changing any of their plans because of today's news. I can see Sony panic reacting with a purchase of SE or something to that effect but even they would have to realise how pointless that would be when MS could just turn around and make a bigger acquisition.
Nobody is panic buying billion dollar corporations. Any purchase that happens is going to be a long discussed and negotiated buy out. That said I'm sure both Sony and Nintendo are reassessing their 5-10 year plans between the growing elephant that is gamepass and Microsoft continuing to purchase big publishers.
 
Nobody is panic buying billion dollar corporations. Any purchase that happens is going to be a long discussed and negotiated buy out. That said I'm sure both Sony and Nintendo are reassessing their 5-10 year plans between the growing elephant that is gamepass and Microsoft continuing to purchase big publishers.
I think given Sony's reliance on third parties, losing control over COD and Activision/Blizzard's (not to mention Bethesda's) other properties most likely has has them panicked to the point where they may be changing their plans moving forward. Obviously any major buyout will be long thought out, but today's news would be a catalyst if ever there was one.

Take Two and SEGA are probably next. Ubisoft would be a reletively cheaper purchase, but would also come with an absolutely gigantic burn rate attached as a hidden cost; so I think they will be picked up after those two.

Sony can't afford EA, so Take Two are likely to be their big counter to Activision. SEGA have also already split off their console division from the amusement division; basically setting them up perfectly for an aquisition now. The only question here is... who gets them first? Sony, Tencent or Nintendo?
I don't think Sony can afford Take-Two. Also, attempting to acquire any major AAA publisher would likely result in a bidding war that they'd likely lose.
 
That would be a waste of capital imo. The only benefit of buying Koei-Tecmo is an increase in Nintendo's game development force. KT has no notable IP that would warrant paying a substantial premium over just purchasing some like TOSE or naturally hiring people.
Dev work force would be the primary driver for a Koei Tecmo purchase. There's already synergy with their studio cultures (this is honestly a BIG thing for Nintendo too), and Koei still being largely family owned and run gives an opportunity if they could be brought on board, but honestly I think the company's just too overvalued at the moment. When you could get Square Enix, Konami or Capcom for the same ballpark price, IP does become more of a consideration.
 
I don't see anything happening here that would pressure Nintendo into purchasing outside companies who aren't already development partners

Nintendo is, again, classically conservative, preferring to stay at just the right size, declining to expand too quickly. They'd sooner invest in development partners than buy them. We're not going to see them buy Sega or Capcom, no, not even these twenty years after those rumors initially started
Prudence =/= business conservatism
I cannot stress this enough. Conservatism is traditionalist beliefs and an aversion and/or resistance to change, that does not describe Nintendo, stop using that word.
Since the thread needs a refresher:

That doesn’t seem terribly conservative to me.
 
Prudence =/= business conservatism
I cannot stress this enough. Conservatism is traditionalist beliefs and an aversion and/or resistance to change, that does not describe Nintendo, stop using that word.
Since the thread needs a refresher:

That doesn’t seem terribly conservative to me.
I'd argue that that definition of conservative actually fits Nintendo pretty well, because they're been exactly that way since long before I was born. You can argue that they are prudent, yes, and I'd agree with you, but they aren't mutually exclusive qualities

What I mean is that Nintendo's actions are not going to be moved much by Microsoft going on a big buying spree, which is an innately conservative position
 
I'd argue that that definition of conservative actually fits Nintendo pretty well, because they're been exactly that way since long before I was born. You can argue that they are prudent, yes, and I'd agree with you, but they aren't mutually exclusive qualities

What I mean is that Nintendo's actions are not going to be moved much by Microsoft going on a big buying spree, which is an innately conservative position
Not being reactive to other activities in the larger market wrt M&As is also not conservative business practices.
 
I wanted to highlight that you don't need to make an acquisition with only cash in hand. Take Two is buying Zynga with cash but not with cash only. I say this because some are saying X doesn't have the cash in hand to buy Y.
 
I wanted to highlight that you don't need to make an acquisition with only cash in hand. Take Two is buying Zynga with cash but not with cash only. I say this because some are saying X doesn't have the cash in hand to buy Y.
Especially now, when interest rates are so low, and credit so cheap.
 
SEGA has monopoly of UFO Catcher machine doesn't it? And also almost all arcade centers in Japan. Is there a motive to be sold?
Sega Sammy sold off the huge bulk of their amusement centres to another company in the 2nd half of 2020. I’m unclear if they sold the remaining percentage of that business yet or not.
 
SEGA has monopoly of UFO Catcher machine doesn't it? And also almost all arcade centers in Japan. Is there a motive to be sold?
AFAIK, isn't Sega divesting its amusements holdings?

EDIT: Sniped by Terrell
 
I'd argue that that definition of conservative actually fits Nintendo pretty well, because they're been exactly that way since long before I was born. You can argue that they are prudent, yes, and I'd agree with you, but they aren't mutually exclusive qualities
Yeah and instead of who they almost bought two decades ago, look at their most recent purchase, Next Level Games. Nintendo worked with that company for a long time on Nintendo's own IP and didn't want someone else to step in. I think that firmly fits into a "resistance to change."
 
After the disasterous release of Cyberpunk, I think CDProjeck will be bought within the next two years for sure. My bet its Embracer who buys them.
Was coming here to say if MS is buying up companies to rehab them then CDP is another good target.

Paradox was also having issues lately too with a toxic environment and their product catalog seems to be flailing lately.

Those are the only two that readily come to mind
 
Yeah and instead of who they almost bought two decades ago, look at their most recent purchase, Next Level Games. Nintendo worked with that company for a long time on Nintendo's own IP and didn't want someone else to step in. I think that firmly fits into a "resistance to change."
Nintendo bought them as soon as the owners were prepared to sell, and the speed of that deal suggests no other company was entertained to sell it to.
 
After the disasterous release of Cyberpunk, I think CDProjeck will be bought within the next two years for sure. My bet its Embracer who buys them.
CDPR is in a tricky situation. GOG is not profitable, The Witcher 3 basically stopped making substantial amounts of money, a big part of their manpower left the company after 2077 and they have problems recruiting talent because of the crunch and abuse scandals. Plus, Cyberpunk is going to make much less money than The Witcher 3 over time since its value plummeted much more quickly.

Their next game needs to be very successful. That, and they will have to release a 60 dollar Definite Edition for Cyberpunk with all the DLC and expansions in the future.
 
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