Regarding the comparisions with Square, Paramount has a yearly revenue of $30B and Square Enix has a yearly revenue of $2.5B, they are in different leagues.
The only Japanese companies really worth buying would be Capcom or Sega.
Square Enix has great revenue and profit, both in a growth trend, like Capcom or the biggest, top grossing Japanese 3rd party publisher: Bandai Namco. To get any of all 3 of them would be a good business, but that successful financial success they are having in recent years is one of the reasons of why they wouldn't want to sell.
Even if as gamers we see a lot of cool IPs in Sega, Sega's revenue and profit is way smaller, inconsistent and aren't in a clear growth pattern. And well, like some of these other companies, Sega has several non-gaming business that Sony may not want.
why is it that other divisions at Sony get money to make multi billion dollar acquisitions, but their biggest division, PlayStation, has to rely on smaller acquisitions?
Sony didn't buy Paramount. They are in talks to maybe make a bid in a joint venture with an investor. In most cases this ends in nothing, specially when Paramount is also in talks with other possible acquirers.
In gaming, Sony also must be in talks with many companies who could be potentially acquired in the future, evaluating their value and potential, check if they would want to sell or not, check if they are also in talks with other potential acquirers, etc.
To make acquisitions, specially big ones, takes time. They also have to make market analysis of how it could affect both companies, design an integration plan, make a market research and business plan of how they'd be integrated and how they would align their plans, etc.
In addition to this, to acquire companies isn't like to buy vegetables in a shop. The other part has to want to sell. And in the case of SIE/PlayStation, being a market leader / key player of their market it has to be approved by regulators.
Regarding why would Paramount would be more appealing to be bought than companies like Square or Capcom, it's becase even having a similar market valuation, maybe cost (it would be a joint venture, Sony wouldn't pay the whole price) and profitability, Paramount produces way more revenue:
Market cap (this is only the value of stocks in the market, the value of the company would be bigger and the acquisition cost even bigger, but in case of Paramount would be split between Sony and an investor)
- Paramount Global: $8.4B
- Capcom: $8,6B
- Square Enix: $4.4B
Yearly revenue
- Paramount Global $30B (in growing trend, tiny post covid drop)
- Square Enix: $2.43B (in growing trend, tiny post covid drop)
- Capcom: $1.07B (in growing trend, tiny post covid drop)
Yearly profit
- Paramount Global: $9.64B (had a small loss post-covid drop)
- Capcom: $0.3B (in growing trend)
- Square Enix: $0.3B (in growing trend)
And more important than this, Paramount has a huge market share, as big as Sony, and acquiring it combining them would mean a big market shift putting them as market leaders, or at least in a way better position.
While companies like Square Enix or Capcom have a tiny market share. Assuming the gaming market has $184B, their market share would be:
- SIE: 14.62%
- Square Enix: 1.32%
- Capcom: 0.58%
It wouldn't be a huge market shift.
with 10B dollars they can buy Square Enix, Kadokawa (FromSoftware) and KoeiTecmo combined
No, it would cost way more than $10B. These companies combined would have a valuation higher than $10B, and recent big gaming acquisitions have been paid on a premium of 40-60% (meaning paying that percent more above the company valuation).
this is ridiculous, SONY NEEDS MORE STUDIOS AND IPS, 2023 we only had one AAA game (Spiderman 2) and 2024 we have nothing from first party
Not true, Sony has like a dozen first party announced for 2024 and released more stuff than Spider-Man in 2023.
SIE has a record number of games under development and is still paying costs of many acquisitions they did in recent years. They temporally paused acquisitions (not only in SIE), because to improve their profitability they'll want to see some of the projects they have in the work being released and to complete paying the costs from previous acquisitions before putting on top more costs from newer acquisitions.
In addition to this, what SIE has to do is to figure out a way to compensate the profitability they are losing with hardware component costs getting more expensive over time, while in all previous generations their cost decreased over time.
They have over 30 first party games under development, and have a ton of dormant IPs that can't work on them because all their teams are busy. They don't lack teams, and -even less- don't lack IPs.
