Moar Consolidation: Sony Acquires Bungie, But Appears To Be More Hands Off Than Microsoft

from the moar!!! dept

A couple of weeks back we asked the question: is the video game industry experiencing an age of hyper-consolidation? The answer to that increasingly looks to be "yes". That post was built off of a pair of Microsoft acquisitions of Zenimax for $7 billion and then a bonkers acquisition of Activision Blizzard King for roughly $69 billion. Whereas consolidations in industries are a somewhat regular thing, what caused my eyes to narrow was all of the confused communications coming out of Microsoft as to how the company would handle these properties when it came to exclusivity on Microsoft platforms. It all went from vague suggestions that the status quo would be the path forward to, eventually, the announcement that some (many?) titles would in fact be Microsoft exclusives.

So, back to my saying that consolidation does seem to be the order of the day: Sony recently announced it had acquired game studio Bungie for $3.6 billion.

Sony Interactive Entertainment today announced a deal to acquire Bungie for $3.6 billion, the latest in a string of big-ticket consolidation deals in the games industry.

After the deal closes, Bungie will be "an independent subsidiary" of SIE run by a board of directors consisting of current CEO and chairman Pete Parsons and the rest of the studio's current management team.

This is starkly different than the Microsoft acquisitions in a couple of ways. Chief among them is that Bungie will continue to operate with much more independence than those acquired by Microsoft. While Sony obviously wants to recoup its investment in Bungie, the focus there appears to be on continuing to make great games using existing IP, building new IP, and creating content for that IP that expands far beyond just the video game publishing space.

What does not appear to be part of the plan are PlayStation exclusives, as explicitly stated in this interview with both Sony Interactive Entertainment CEO Jim Ryan and Bungies' CEO Pete Parsons.

In an interview with GamesIndustry.biz, Sony Interactive Entertainment CEO Jim Ryan says that Destiny 2 and future Bungie games will continue to be published on other platforms, including rival consoles. The advantages Bungie offers Sony is in its ability to make huge, multiplatform, live-service online games, which is something the wider organisation is eager to learn from.

"The first thing to say unequivocally is that Bungie will stay an independent, multiplatform studio and publisher. Pete [Parsons, CEO] and I have spoken about many things over recent months, and this was one of the first, and actually easiest and most straightforward, conclusions we reached together. Everybody wants the extremely large Destiny 2 community, whatever platform they're on, to be able to continue to enjoy their Destiny 2 experiences. And that approach will apply to future Bungie releases. That is unequivocal."

That's about as firm a stance as you're going to get in this industry. And it is a welcome sign in a few ways. Primarily, Bungie fans will be pleased to know the acquisition doesn't mean they'll lose out on game releases if they don't own a PlayStation. But perhaps just as important is that this demonstrates another route big gaming companies can go with these acquisitions.

As I stated in previous posts on the Microsoft acquisitions: consolidation doesn't have to be a bad thing, but when it results in less customer choice, that's not great. That Sony is doing this differently is a good sign.

Filed Under: consolidation, video games
Companies: bungie studios, microsoft, sony

Video Game Execs Freak Out Over Used Game Sales

from the try-learning-some-economics dept

You would think that after years and years of evidence that a second-hand, "used" market for products increases the value of the original products that executives who create the original products would know better than to complain about resales or demand a cut of the profits -- but apparently you'd be wrong. Reader Lucretious writes in to let us know that the audio director of Bungie Studios, a Microsoft subsidiary and the makers of Halo among other things, is out complaining about how the second-hand market for video games has a huge detrimental effect on the industry, claiming that the game makers deserve a cut of all of those sales.

Except that's not just wrong, from a common sense standpoint, it's wrong from an economic stand point and a legal standpoint. It's almost impossible to come up with a rationale where it actually does make sense. First, on the legal front, the first sale doctrine is well established. When it comes to copyright products, once you've sold something, you really have sold it, and the buyer has every right to resell it -- just as they do with things like a chair or a house -- without owing the original creator another dime. Second, from an economic standpoint, plenty of studies have shown the importance of an active second-hand market. First, for buyers of the initial product, the fact that they can resell it is part of the value they put in the price. Wipe out (or heavily tax) the second-hand market, and you decrease the amount people are willing to pay for the initial product. Thus, you actually shrink the market for your product. There's also a lot more research in terms of signalling and market adoption that show that a second-hand market is important. Finally, from a common sense standpoint: you sold the game, you no longer have control over what people do with it. That's how transactions work. Would the folks at Bungie like it if we suddenly started telling them how they could spend the money we gave them for games? No? Then they shouldn't complain about what people do with their games.

Filed Under: economics, secondary markets, video games
Companies: bungie studios, microsoft