Serial article regarding M&A on NNA (vol.113)

The previous article was about the trend of TOP15 M&A deals involving Japanese companies in 2022. Moving on, today’s article will focus on the gaming industry, and this article will begin by looking at the two acquisitions done by a subsidiary of Sony Group.

1. Acquisition of the US video game company by Sony Interactive

Entertainment Sony Interactive Entertainment (SIE) is a 100% subsidiary of Sony Group. It announced on the 31st January 2022 that they were going to acquire Bungie, an independent game video company. The transaction amount was JPY 514 billion, and it was the largest acquisition of gaming-related companies for Sony Group. SIE handled research and development, production, and sales of the home video game console (which is named “PlayStation”). Also, the development and sales of their game software too. On the other hand, Bungie is a video game company based in the US that was once affiliated with Microsoft from 2000 to 2007. It is credited with increasing the popularity of the home video console named “Xbox”, which is Microsoft’s signature product. Their major software titles include series of “Destiny” and “Halo”. SIE stated that this acquisition would be an important step for its strategy and make “PlayStation” more popular among a greater audience.

2. Investment expansion in the US game company by Sony Corporation of America

In the investment expansion of Epic Games (Epic), which is the US video game company by Sony Corporation of America (SONAM). SONAM is one of the subsidiaries of Sony Group that functions as the US headquarter. On 11th April 2022, they announced the investment expansion of JPY 130 billion in Epic. It was the third investment in Epic by SONAM, and the total amount of investment also has reached USD 1.45 billion. With this investment, SONAM will hold 4.9% of Epic’s shares. Simultaneously Meanwhile, Epic announced that they received an investment of 1 billion from the parent company of LEGO as well. Epic is widely known for its globally popular game, “Fortnite”, but apart from developing video games, Epic also produce development tools for filmmaking and manufacturing. According to the news release of Epic on 11th April 2022, they aim to strengthen their “Metaverse” business, which provides services by creating virtual worlds on the Internet through this investment.

3. The trend of M&A in the gaming industry

In 2022, M&A in the gaming industry was booming with announcements of several major deals in addition to the two deals above. The equity value of Epic has reached over USD 29.5 billion due to the investment by Sony and LEGO. Still, the other announcements showed that the expectation would remain active this year. For example, the acquisition in one of the major game software companies of USD 68.7 billion by Microsoft, which is the largest investment ever for them, and the acquisition of a mobile game company by Take-Two Interactive, which is the US major game software company. Due to diffusion of smartphones, the game players’ population has been rapidly increasing, and it is said that it has already reached 3 billion by 2021. Besides that, playing video games also has become one of the necessary entertainments for us to cope with COVID-19. Nonetheless, since the gaming industry is still new and has room for growth. Hence, more aggressive M&A within this industry can be expected soon.

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