So far in 2022, Microsoft has made a $70bn bid for Activision Blizzard while Take-Two Interactive has made an $11bn offer for Zynga. Only a few days ago Sony bid $3.6bn for Bungie.
As a result the numbers for 2022 have already surpassed the record for deals set in 2020, when the industry saw 1,159 deals valued at over $85 billion.
Mobile gaming appears to be a key driver helped by new consumer trends driven by the pandemic of the past two years, but more importantly it looks like the industry is looking to consolidate in the pursuit of new revenue streams.
However, while the benefits of consolidating are obvious, these moves have raised the interest of the authorities. In the US, the Federal Trade Commission (FTC) is said to be about to start investigating Microsoft’s move for Activision Blizzard, reflecting efforts to strengthen merger guidelines.
Recent merger and acquisition activity, across many different industries, has raised concerns as industries have become more concentrated.
For Microsoft it’s a major move to grab a share of the booming videogaming market where it will be competing with the likes of Tencent and Sony.
The deal would make Microsoft the world’s third largest third largest gaming company, but it needs to get past the regulators.
Microsoft and Activision have given themselves until June 2023 to complete the transaction.
It’s an enormous deal for Microsoft and the billions its offering for Activision highlights the level of competition that the sector is now seeing.
