Sony shares slid over 4% premarket as Microsoft gaming deal cast shadow.
Shares in Japan's Sony Group fell over 4 % premarket after gaming rival Microsoft said it will buy developer Activision Blizzard in a record $68.7 billion deal for the industry.
The blockbuster acquisition escalates Microsoft’s spending spree to secure intellectual property assets for its Xbox Game Pass service, wiping $20 billion off Sony’s valuation in a day. The push to attract paying subscribers with an overwhelming portfolio of games challenges Sony’s traditional console business model that relies on high-profile exclusive titles and hardware sales. Games and network services account for about 30% of Sony revenue.
While Sony's PlayStation is widely seen as having a lead in the generational battle with Microsoft's Xbox, the purchase of the "Call of Duty" maker comes as Microsoft is aggressively expanding its Game Pass subscription service.
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