Gaming Monthly Highlights: US$85 Billion M&A Spree, New Consoles Gain Traction
February was a big month for the gaming industry, with major players making big acquisitions and next-generation consoles flying off the shelves.
An acquisition spree in the gaming space has resulted in a massive amount of money being used on business transactions — in just one month, the industry spent more than it did in all of 2021.
Here the Investing News Network (INN) offers a recap of February highlights in the gaming world.
January brings gaming deals worth over US$85 billion
According to a report from GamesIndustry.Biz, the value of three gaming deals completed in January clocked in at US$85.4 billion, more than banking firm Drake Star's estimate for the value of deals in the entirety of 2021.
Those three acquisitions are some of the biggest transactions seen in the gaming industry:
- Microsoft plans to acquire Activision Blizzard (NASDAQ:ATVI), maker of the popular Call of Duty game series. The deal is valued at US$68.7 billion and is expected to close in the 2023 fiscal year.
- Shortly after the blockbuster acquisition from its direct competitor, Sony announced it would purchase video game developer Bungie for US$3.6 billion. Bungie, the creator of the Xbox-exclusive Halo series, oversees the popular shooter series Destiny.
- Take-Two Interactive (NASDAQ:TTWO) is buying Zynga (NASDAQ:ZNGA), an American game development company focused on the mobile and social game landscape. Zynga created the massive hit game FarmVille. The publisher behind the popular Grand Theft Auto and NBA 2K game series will pay US$12.7 billion for the mobile developer.
“Given the trajectory so far, the industry could break $150 billion in deals this year, according to investment bank Drake Star Partners,” the GamesIndustry.Biz report indicates.
Gaming research firm Newzoo notes that these acquisitions all follow different paths of interest. For example, the biggest of the bunch was designed as a way for Microsoft to strengthen its intellectual property position and add a steady roster of developers to work on its franchises.
“Microsoft is playing the long game, and game content and services are at the heart of it. Massive franchises like Call of Duty, Warcraft, and Candy Crush and smaller IP like StarCraft and Crash Bandicoot will bring value to Game Pass,” Newzoo analyst Rhys Elliott said, according to a report from GamesBeat.
Data shows new consoles are settling in
In January, the next-generation consoles from Sony and Microsoft took first and second place for best-selling hardware, respectively. Hardware sales hit US$390 million during the period, a 22 percent uptick year-on-year.
“This is the highest total for a January month since the US$447 million total reached in January 2009,” NPD analyst Mat Piscatella said in a report.
Around the INN homepage
- Ways to Invest in Gaming: Gaming has gained a massive amount of popularity, and investors are following this trend. What's the best way to get started today? INN published an explainer covering how to pick a position in this market.
- Mobile Gaming Stocks: INN collected some of the biggest stocks in the mobile gaming space, one of the biggest core entities in the entire gaming industry.
From around the web
- CNET reviewed the Steam Deck, a new portable gaming computer system from Valve that is similar to the popular Nintendo Switch lineup of consoles. Overall the review is positive, expressing bullish sentiment on the long-term potential for the device. The possibility of allowing computer gaming through a more accessible device appears increasingly enticing.
- NPD Group's latest sales report shows Nintendo (TSE:7974) has another hit on its hands thanks to the most recent entry in the Pokémon franchise. Pokémon Legends: Arceus has become the top seller in terms of physical and digital games, surpassing last year’s top game, Call of Duty: Vanguard. The new Pokémon entry has been praised for revamping the traditional formula of the popular monster-catching game and introducing a new storyline for players. However, it has been criticized for sluggish performance and dull environments. One thing is certain though — players are responding well to the new direction of the series and have purchased the games in droves, buying over 6.5 million units in its first week.
One last thought...
We want to thank you for checking out this new monthly gaming update. We’re really excited to bring more video game investment coverage thanks to this new series. And we also have a similar series planned for our blockchain channel looking at all things crypto (read it here). We look forward to giving you more of these updates.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
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Bryan is a Senior Editor with INN. After graduating from the Langara journalism program he did some freelance reporting with community newspapers in British Columbia. He initially wrote about the life science space for INN and now spends his time covering the marijuana market, from Canadian LPs to US-based companies, and the impact of this sector on investors.
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