Sony shares have plummeted in value since Microsoft’s recently announced intention to purchase Activision Blizzard – suggesting investors are worried the Japanese giant can’t keep up.
Sony shares have been on a healthy upwards trajectory for the last five years, increasing in value by over 250% since January 2017. However, if you were to have glanced at Sony’s share price just a few days ago, before Microsoft’s $95 billion mega-deal with Activision Blizzard, that growth would have appeared even more substantial.
Almost immediately after Microsoft announced their acquisition of Activision Blizzard, the video game publishing giant that own the IP rights to successful franchises such as Call of Duty, World of Warcraft, Diablo and Overwatch, Sony stock value fell almost 13%.
Activision Blizzard are responsible for some of the most popular video games on the market, games which could ultimately factor into which console out of the Xbox Series X/S and PS5 consumers will purchase.
Traditionally, Sony’s PlayStation consoles have outsold Microsoft’s Xbox by a healthy margin, but that has often been attributed to their superior catalogue of exclusive game titles.
PlayStation exclusives such as God of War, Horizon Zero Dawn, and Marvel’s Spider-Man have meant that Sony have held an edge over their rivals in terms of critically acclaimed single-player games. However, this is historically been because many of the most popular games on Xbox were also available on PlayStation (Call of Duty, Skyrim).
That is now changing, and it appears Sony shares are paying the price as a consequence.
The last year has seen Microsoft making some major moves, buying up development studios and publishing houses left right and centre. When viewed in conjunction with their 2021 purchase of Zenimax/Bethesda, this Activision Blizzard deal carries some extra weight.
In a war of attrition, as the console wars have turned out to be, the side with the greatest resources tends to ultimately prevail. With their recent spending, Microsoft have demonstrated they are prepared to bully Sony into submission.