Sony has announced that it would purchase video game company Bungie for $3.6 billion (£2.7 billion).
Bungie, well known for the Destiny and Halo titles, will assist Sony in “reaching billions of people,” according to Sony.
Halo is one of the games that helped Microsoft’s Xbox gain popularity.
Microsoft announced intentions earlier this month to purchase video gaming behemoth Activision Blizzard for $68.7 billion, the biggest acquisition in the industry’s history.
“This is a critical step in our aim to broaden PlayStation’s appeal to a far broader audience,” Jim Ryan, president and CEO of Sony Interactive Entertainment, stated (SIE).
“We recognize the importance of Bungie’s community to the studio and look forward to assisting them as they remain independent and develop.”
Sony did not specify a timeframe for when the acquisition is expected to be completed.
Bungie was purchased by Microsoft in 2000, and their game Halo: Combat Evolved was released as a launch title for the Xbox.
Halo helped to popularize the Xbox by selling millions of copies.
Bungie broke out from Microsoft in 2007 to become its own company.
Microsoft maintained the Halo franchise’s intellectual property under the conditions of the split.
Bungie employs around 900 people and is situated in Washington state.
Following the completion of the takeover, Bungie will operate freely and continue to publish its own games under the terms of the Sony agreement.
Bungie is expanding the universe of Destiny 2, a first-person shooter video game that was published in 2017.
“Both Bungie and SIE think that gaming worlds are only the start of what our IP [intellectual property] will become,” stated Pete Parsons, Bungie’s CEO and Chairman.
“We will accelerate Bungie towards being a worldwide multi-media entertainment business focused to delivering on our creative vision with SIE’s backing,” he stated.
The Sony-Bungie transaction helped make January a record month for video game mergers and acquisitions (M&A).
Take-Two Interactive, the creator of Grand Theft Auto, announced the purchase of Zynga for $12.7 billion, while Microsoft announced its plan to buy industry behemoth Activision Blizzard for $68.7 billion.
“These three transactions alone exceed the $85 billion in M&A deal value in 2021, which was already an annual high,” said Daniel Ahmad, a senior analyst at market intelligence firm Niko Partners.
This year, Mr. Ahmad predicts greater consolidation in the gaming business.
“Technology and media firms, in particular, see game publishers and developers as having important IP, talent, and content,” said Mr Ahmad, who covers the video game sector in the Middle East, North Africa, and Asia.
“As a result, we must ask ourselves, ‘Will there be another acquisition?’ rather than ‘Who is next?'”
The Activision Blizzard deal will be Microsoft’s largest in history, with the company acquiring game titles such as Call of Duty, Warcraft, and Overwatch. The agreement is set to be finalized in 2023.
Microsoft and Sony are competing for gamers’ attention.
Sony’s PlayStation 5 system is often regarded as superior than Microsoft’s fourth-generation Xbox consoles.
In recent years, the Japanese business has bolstered its network of in-house gaming studios and generated a slew of exclusive successes, including the Spider-Man series.
It’s also a virtual reality pioneer, and this month it hinted some specifics about its next-generation gear.