Sony's future and possible studio/publisher acquisitions

[Yurinka]

I don’t SQEX will cost this much. The extra amount paid for a buyout of public-traded companies, differs from case to case.

Square Enix current market cap is $5.49B and you can be assured that after the Embracer deal, SQE value will drop down below. Two big studios (Eidos Interactive & Crystal Dynamics) and a middle sized with SQEX Montreal, with a plenty of franchises will be enough for a down value of SQEX as a whole. I say Sony will pay like $6.5B for them.

Source

They paid $3.7B for Bungie.

They would pay way more than the double for Square Enix: they have many big IPs, they dominate the sales of the JRPG genre, they have the current top MMORPG in PC (+PS) they are very successful in mobile adapting their IPs without monetization crazyness, are in great shape in financials and growing, etc.

 

[Eternal_Wings]

They paid $3.7B for Bungie.

They would pay way more than the double for Square Enix: they have many big IPs, they dominate the sales of the JRPG genre, they have the current top MMORPG in PC (+PS) they are very successful in mobile adapting their IPs without monetization crazyness, are in great shape in financials and growing, etc.

They only paid for Bungie this much because to bind the talent to the studio. They confirmed that they had could bought Bungie for only $2.4B but that wouldn’t had guaranteed the staying of the staff.

 

[Yurinka]

They only paid for Bungie this much because to bind the talent to the studio. They confirmed that they had could bought Bungie for only $2.4B but that wouldn’t had guaranteed the staying of the staff.

This is totally wrong. What they said that the cost of the acquisition has been $3.7B, which splits into $2.4B for buying the shares once the acquisition is closed and the other $1.3B are for retention bonuses and other costs to be paid across multiple years. They never said that could have bought it for $2.4B.

Retention bonuses are a standard for any company acquisitions and even outside them: they want to make sure that (at least) the key staff stays there for at least a certain amount of years, and they pay bonuses for that.

The acquisition is $3.7B because they created two IPs that have been top tier in money generated and revolutionized FPS and MP in consoles, and in the case of Destiny the GaaS in consoles too. Plus they have at least a couple of studios with a good amount of very talented people and have projects (including minimum a couple of new IPs) to be released relatively soon that I assume are very promising, plus they also built a mutual trust with their relationship since the deal for the first Destiny, and see they can help each other to make movies and tv shows of Bungie IPs and sharing top tier GaaS(+MP & FPS & IP creation) knowledge, data and tools with PS Studios. And well, on top of that Sony also gets their revenue and profit for SIE and secures their current and future projects to be on PS and pretty likely PS+.

 

[Savant]

Both are very unlikely acquisitions: Take 2 is too expensive, .

How many times are you going to keep repeating this FUD non sense before you correct yourself. You have demonstrated that you really don't know what you're talking about and have a basic understanding of things at best, but without any of the experience or application

You are no better than that terrible graph if you're going to dig your heels in and double down on falsehoods

Sony could easily buy T2, and its been explained to you many times now.

Sony upped their aquistions budget to 30billion, and even though that's for all of Sony, we know Playstation is the main driver and how important Playstation is to Sony

Remember what the CEO of Sony movies already said. Sony is going to be focusing majorly on Playstation and integrating everything around the foundation of Playstation

 

[Dabaus]

I don’t SQEX will cost this much. The extra amount paid for a buyout of public-traded companies, differs from case to case.

Square Enix current market cap is $5.49B and you can be assured that after the Embracer deal, SQE value will drop down below. Two big studios (Eidos Interactive & Crystal Dynamics) and a middle sized with SQEX Montreal, with a plenty of franchises will be enough for a down value of SQEX as a whole. I say Sony will pay like $6.5B for them.

Source

Square is in a weird place where like 70-80 percent of their home console sales come from playstation so any potential buyer would have to factor in the PS userbase. In fact most japanese companies fanbases are on playstation if not there nintendo. PC is a factor as well for some of these companies like from soft.

 

[Yurinka]

How many times are you going to keep repeating this FUD non sense before you correct yourself. You have demonstrated that you really don't know what you're talking about and have a basic understanding of things at best, but without any of the experience or application

You are no better than that terrible graph if you're going to dig your heels in and double down on falsehoods

Sony could easily buy T2, and its been explained to you many times now.

Sony upped their aquistions budget to 30billion, and even though that's for all of Sony, we know Playstation is the main driver and how important Playstation is to Sony

Remember what the CEO of Sony movies already said. Sony is going to be focusing majorly on Playstation and integrating everything around the foundation of Playstation

I already expained you with many facts and data why you are wrong in this other post. I explained what % of that budget they did spent in gaming when they had spent almost 10B, when they review it, that it's for multiple years, that the budget is also for investments and stock repurchase and not only for acquisitions and that you have to add a premium price to buy stocks for an acquisition that in big recent gaming acquisition was of around 50% etc. So I explained why they can't buy Take 2 this FY, with the current budget, and that they can review the budget to make larger acquisitions but before will announce it to their investors in thier FY fiscal reports. Won't repeat them.

In that post I provided related facts and numbers that explain and back my points and show why you are wrong. You aren't able to provide a single data or fact that proves me wrong or backs what you claims. You only attack in a rude and toxic manner. Be respectful and polite and try to back your claims with objective and factual data, not with insults and attacks.

What the Sony Pictures CEO said over half a year ago when asked if he thought consolidation was going to continue in cinema was: "I think the traditional medium of television and film has probably peaked and the new growth area will be the games business, and who’s better positioned than Sony for that business? I do think you’ll see some consolidation on that side. You’ll probably see a little more on our side as well. I do think there are probably too many film studios and you might see one or two less over the next five-to-ten years. But I think the next area of consolidation will be the games business."

So he said something obvious after years with important acquisitions in the gaming industry: that the gaming industry has been entering a consolidation stage and that as one of the top dogs in the food chain Sony will make some of these acquisitions, as Sony has been doing during the Jimbo era. He didn't mention Take 2 or that Sony was going to make gaming acquisitions of that size.

 

[Bryank75]

Firstly... my actual expectations are low under Jim Ryan. I expect Iron Galaxy, Lucid Games and Camoflaj and NONE of those excite me... I think they are shit.


I would say 2 large companies that make the most sense to me on multiple levels are;

1. WB / Discovery - An incredibly pricey option (Approx 40B) but would make Sony one of the two biggest film companies in the world, it would give them control over many incredible IP's that can be used across film, TV and gaming.
Mortal Kombat is an important piece of any esports / FGC overarching strategy.
Lego games have massive reach in terms of demographics and is a huge money maker....

2. Epic - Also quite pricey, lays a foundation and expands the reach of Sony owned gaming stores.... playerbase potentially increases to 250+ million.
PSPlus can be integrated into Epic Game Store.... thus increasing subscription numbers.
Unreal engine control is a huge ace in the hole and safeguard against incoming competition from larger tech companies.
A huge range of developers and existing deals come with Epic Games.
Fortnite profits would all come straight to Sony and would be used to have digital events and concerts.

 

[Kokoloko]

I keep seeing people say that someone would buy Konami's IP but would they even be willing too? maybe Sony can cut a deal where Konami keeps the IP but Sony develops the games for them!

I think 4+ billion could be a price they are willing to take to sell the ip or company.

But yeah your right, maybe a deal over game licenses is something more likely to happen.

Whatever it is, Sony need to start moving and do something somewhere

 

[Kokoloko]

Firstly... my actual expectations are low under Jim Ryan. I expect Iron Galaxy, Lucid Games and Camoflaj and NONE of those excite me... I think they are shit.


I would say 2 large companies that make the most sense to me on multiple levels are;

1. WB / Discovery - An incredibly pricey option (Approx 40B) but would make Sony one of the two biggest film companies in the world, it would give them control over many incredible IP's that can be used across film, TV and gaming.
Mortal Kombat is an important piece of any esports / FGC overarching strategy.
Lego games have massive reach in terms of demographics and is a huge money maker....

2. Epic - Also quite pricey, lays a foundation and expands the reach of Sony owned gaming stores.... playerbase potentially increases to 250+ million.
PSPlus can be integrated into Epic Game Store.... thus increasing subscription numbers.
Unreal engine control is a huge ace in the hole and safeguard against incoming competition from larger tech companies.
A huge range of developers and existing deals come with Epic Games.
Fortnite profits would all come straight to Sony and would be used to have digital events and concerts.

Both sound great but I don’t think Sony is willing to spend more thn 5-10 billion tops for something. What is there exact budget now?

 

[Bryank75]

Both sound great but I don’t think Sony is willing to spend more thn 5-10 billion tops for something. What is there exact budget now?

Dunno, they increased their budget to 30 billion but say its split between acquisitions and capital investments and then they go on to say there is no hard limit....

So it's very unclear.

 

[Gediminas]

Based on recent premium paid for the acquisitions of Activision Blizzard King and Zynga (around 50%), I added $50 to the current market cap of many public game companies to get a rough idea of the money that would cost to acquire them completely, even if it isn't needed to buy their 100% to control them:

• Tencent $604.11B
• Netease $94.8B
• Nintendo $77.88B
• Sea (Garena) $63.2B
• EA $54.57B
• Roblox $34.8B
• Take 2 $31.7B
• Nexon $29B
• Bandai Namco $24.8B
• Unity $16.25B
• Embracer $13.14B
• Konami $11.28B
• Capcom $8.9B
• NC Soft $8.6B
• Koei Tecmo $8.46B
• Square Enix $8.25B
• Ubisoft $7.8B
• CyberAgent $7.53B
• Netmarble $6.74B
• Perfect World Entertainment (Chinese film + PC and mobile games) $6.12B
• Sega Sammy $5.52B
• CD Project $3B (its market cap is $1.99B, was $7.42B in 2020 due to Cyberpunk hype before release. Its current price is still way overvalued)
• Paradox Interactive $2.82B
• DeNA $2.5B
• Mixi (mostly mobile games for Asia) $1.82B
• GungHo $1.8B
• Gree (Japanese mobile games for Asia + anime) $1.58B
• Huya (China's Stadia) $1.2B
• Team 17 $1.14B
• Frontier Developments (devs of Elite series) $1B
• Remedy $0.51B
• People Can Fly $0.48B
• Marvelous $0.45B
• Focus Home Interactive $0.39B
• Devolver Digital $0.41B
• 11 bit studios $0.36B
• Starbreeze $0.06B
• Atari $0.06B

We have to consider a few months ago Sony rised their mid term budget for acquisitions, investments or Sony stock repurchases to 4 trillion yen (~$30B). We have to consider that only a part of it will be for acquisitions, and it's for the whole Sony and that only a portion of it will be for gaming. And also "medium term" for a corporation like Sony means like 2-3 years.

So I assume that Sony would only spend this FY maximum around $10B on gaming acquisitions, maybe $15B being optimistic. When time ago they did set a $18B budget for investments, acquisitions and stock repurchases and spent over 10B of it, around 40% of it was for gaming.

Regarding companies not publicly traded like Valve, Epic or ARC System Works, people can make estimations of their value or cost but this means nothing because their major stakeholders freely decide the selling price.

We also have to consider that Sony should see them as a good fit and that their major stakeholders would have to want or need to sell and see Sony as a good fit. And the acquired company isn't of the same country than PlayStation/Sony (Japan) then the government of the acquired company could block the acquisition if it's a key strategical tech company for their country, something I could see it happening if trying to buy the most valued companies from China, USA or Korean companies but Sony can't afford at least most of them.

This budget doesn't mean Sony can't afford to spend more in acquisitions: it means they told their investors that plan to spend aprox. that money on a certain range or time. To spend more than this budget, but to do it right Sony could review it and informing their investors before making such acquisitions. And when they review these budgets and announce it is when announcing their fiscal year report in around May. With that I mean that if they review this budget to increase it would be in May 2023 or May 2024. So I wouldn't expect Sony to spend above $10B or being optimistic $15B in gaming acquisitions this FY.

Where is Kodakawa?

 

[Yurinka]

Where is Kodakawa?

A Japanese corporation with a lot of subcompanies.

The owner of several Japanese publishers and developers like From Software, Spike Chunsoft, ASCII Media Works, Media Factory, Enterbrain, Kadokawa/Kadokawa Games/Kadokawa Shoten.

They also are one of the biggest manga, magazines, game guides, game artbooks or books publishers in Japan. Own many manga and anime top IPs, they also make anime, cinema and tv stuff. Also own internet things like Nico Nico, which is like the Youtube for Japanese people.

Some time a ago Kadokawa gave 2% of its own company shares to Sony and 2% to the parent company of CyGames to help Kadokawa's anime, console games and mobile games reach a global audience since until now they've been always too focused on Japan only and now want to open to the world in a 3 ways deal.

In the same way that FromSoft made dozens of PS exclusives since the PS1 days, Kadokawa and its other teams also made dozens of PS exclusives but most of them released in Japan only.

 

[Kokoloko]

Dunno, they increased their budget to 30 billion but say its split between acquisitions and capital investments and then they go on to say their is no hard limit....

So it's very unclear.

Hmmmm… They still haven’t “retalitated” to the Bethesda acquisition they said they would… Why are they so slow with doing things?

 

[nominedomine]

Hmmmm… They still haven’t “retalitated” to the Bethesda acquisition they said they would… Why are they so slow with doing things?

Where did they say they would? Retaliate against MS buying a publisher because they wrecked their own studios to the point that they had to spend billions to take games away from PlayStation? It's like asking why Usain Bolt hasn't retaliated against you going for a walk yesterday.

Maybe 7 years from now Sony might need to do something to counter not having the next TES but until then it hardly affects them. Starfield already had a terrible showing so they don't have much to be afraid of for missing that one. What else should Sony care about missing the next Doom? That's nothing.

Activision Blizzard is the one Sony might need to react to but even that remains to be seen (which games are they actually going to pull from PlayStation and when are they going to start doing that?). They have plenty of time to come up with something if CoD skips PlayStation years from now or if Diablo 5 is Xbox exclusive 12 YEARS from now.

 

[Dabaus]

Dunno, they increased their budget to 30 billion but say its split between acquisitions and capital investments and then they go on to say their is no hard limit....

So it's very unclear.

The question is, what other segments can they spend money on? Big music deal? Doubt it because what big studio is there to buy and Sony already is approaching antitrust territory with their music market share.

Movies? What big movie studio is for sale that if Sony got in a bidding ware would be less than 30 billion? Aren’t paramount and wb already worth more than 30 billion?

Semiconductors? MYbe they they buy a plant or manufacturer for a few billion?

It seems to me that when you look at the other Sony divisions they’re in a spot where they either can’t do anything (music and anime) because of antitrust concerns or would be extremely expensive like movies.

So I think that the majority of this budget will be for gaming. 30 billion can land you 1 or 2 smaller publishers (like square or capcom) and a smaller partner studios. Plus some money to invest in companies like epic and mobile game developers.

If Sony wanted to use 30 billion on gaming here’s what I would do:

6-7 billion or better yet a merger, with sqaure enix. Ff14 is worth it alone plus everything else they bring.

1 billion for smaller studios like deviation, ember labs, arc systems etc.

That leaves you with 20-22 billion dollar range.

I’d start to play defense now with stock buys:
-Invest a billion dollars into capcom stock to have a seat at the table.
-Invest another billion into kadokawa in stock
-Invest anywhere between 3-5 billion dollars into take 2 stock
-Continue to make small stock buys in to epic

Use the remainder 10-12 billion on the rest of the company.

 

[Remember_Spinal]

Eidos Montreal founder: "I heard rumours that Sony said they're really interested in [acquiring] Square Enix Tokyo, but not the rest."​

He continues: "If I read between the lines, Square Enix Japan was not as committed as we hoped initially. And there are rumours, obviously, that with all these activities of mergers and acquisitions, that Sony would really like to have Square Enix within their wheelhouse. I heard rumours that Sony said they're really interested in Square Enix Tokyo, but not the rest. So, I think [Square Enix CEO Yosuke] Matsuda-san put it like a garage sale."

 

[Eternal_Wings]

It’s going to happen. Square Enix x Sony is becoming reality.^^

 

[Dabaus]

Eidos Montreal founder: "I heard rumours that Sony said they're really interested in [acquiring] Square Enix Tokyo, but not the rest."​

According to him Sony really wants square, so square sold off eidos for cheap, which h sounds like sqaure really wants this too.

 

[Remember_Spinal]

Square Enix puts the S-E in SIE

 

[LightBolt]

Sony loves Clouds remember ?