Microsoft, Amazon and Google are actively seeking further video game company acquisitions, with at least three deals going on right now.
That’s according to BWWMediaGroup’s Brad Sams, a journalist specialised inMicrosoft-related news. Speaking ina new video show, Sams said he personally knew of multiple game acquisitions that could be completed in the near future.
“I’ve been hearing a lot of conversations behind closed doors about acquisitions in the industry. There’s a lot of moving things going on right now,” he said.
“It’s hard to see which companies are going to get snatched up and by what vendors… but I can tell you there are some big industry names out there being approached by Microsoft included, but then you also haveAmazon, and you also haveGoogle.
“Sonyis part of the conversation, but it doesn’t seem to be as much as Google and Amazon are when Microsoft enters the fold. You also haveEA: look what happened withCodemastersfor example”.
As the games industry continues to thrive during the coronavirus pandemic, the market has seen a significant rise in mergers and acquisitions.
According to research byInvestGame, the value of M&As in the games industry exceeded $22 billion in 2020, including the yet-to-be-completed sales ofZeniMax to MicrosoftandCodemasters to EA, which is the highest amount since 2016. It said the key acquirers in 2020 wereTencent,Embracer Group, Stillfront and Zynga.
The report notes that because video games have outperformed many industries hurt by the pandemic, public and private investors have started to target the industry as a perceived safe bet. That’s a notion echoed by journalist Sams.
“The valuations of these mobile gaming companies are going up very fast, as the industry is… I don’t want to say condensing, but there are suddenly new players in the industry,” he said.
“You have Amazon andFacebookwho genuinely need new IP, and you have Microsoft which is building up this gaming solution called Game Pass, and there are a lot of companies who are just being snatched up from under each other.
“Be on the lookout for acquisitions… I’m hearing a lot of things going on, and I know of three specific acquisition targets for various companies going on right now.”
According to a new note from analyst group DFC Intelligence,Cyberpunk 2077 developer CD Projekt could be “one to watch” as a possible acquisition candidate, as it attempts to deal with the fallout of a troubled launch.
Mortal Kombatand Batman Arkham firmWarner Bros. reportedly decided not to sell off its games business last year, according to a report.
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Last year, Xbox bossPhil Spencerindicated that going forward,Microsoft viewed Amazon and Google as its primary competitors in the games business.
Speaking toProtocol, Spencer claimed that Xbox’s traditional rivalsNintendoandPlayStationweren’t set up to compete in the race to take gaming truly mainstream via the cloud.
“When you talk about Nintendo and Sony, we have a ton of respect for them, but we see Amazon and Google as the main competitors going forward,” Spencer said.
“That’s not to disrespect Nintendo and Sony, but the traditional gaming companies are somewhat out of position. I guess they could try to re-create Azure, but we’ve invested tens of billions of dollars in cloud over the years.”
Spencer added: “I don’t want to be in a fight over format wars with those guys while Amazon and Google are focusing on how to get gaming to 7 billion people around the world. Ultimately, that’s the goal.”
Currently,Xbox’s game streaming service is available as part of its $14.99/£10.99 Game Pass Ultimate subscription, which grants users access to over 100 games at no additional cost.
Stadia’s Pro sub, which includes monthly free games, is priced at $9.99/£8.99 per month. Since June 3, Google has beenofferingStadia Pro free for one month for new users.
