The blockbuster acquisition completes Microsoft’s intellectual property asset spending campaign for its Xbox Game Pass service, mimicking about $ 20 billion from Sony’s one-day valuation. Sony is one of the world’s leading companies in photography, electronics, and video game consoles. The corporation also owns a film production and distribution company called Sony Films. Games and network services make up about 30% of the company’s revenue.
Microsoft recently reported that it has over 25 million Game Pass subscribers, and that it is expected to offer as many games from the creator of Activision Blizzard within its Xbox platform, across both existing and new titles.
“Sony faces a monumental challenge to face the power of this war of attrition,” Said Amir Anwarzada of Asymmetric Advisors. “With the likelihood of Call of Duty being added exclusively to the Game Pass staff, Sony’s front winds are only getting harder.”
Shares of other gaming companies rose following Microsoft’s announcement, with Capcom Co (NYSE: 9697.T) up 4.6% on the Tokyo Stock Exchange and Square Enix Holdings Co (NYSE: 9684.T) up 3.7% in Tokyo.
Sony has maintained a consistent lead in exclusive game sales, relative to competitors’ offerings. Now that Microsoft is gearing up to close the gap, Sony will be under pressure to respond.
“Sony will have a hard time keeping up with Microsoft in terms of money it can spend to buy the IP of popular games,” he said. Said Morningstar Research analyst Kazunori Ito. “The fall in Sony’s stock illustrates the fact that investors are worried that Sony will not be able to continue to grow forever, given the industry’s move away from software – based models.
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