Sony cinema boss says he expects more game company buyouts
Sony’s movie business boss said he believes the video game business will be the next focus of corporate mergers and acquisitions.
Speaking at Bank Of America’s Merrill Lynch Media, Communications & Entertainment conference this month (transcribed by VGC), Sony Pictures Chairman and CEO Tony Vinciquerra was asked to comment on whether the film industry will see further consolidation.
He replied, “I think the traditional medium of TV and film has probably reached its peak and the new area of growth will be the games industry, and who better than Sony for that industry?”
“I think you’ll see some consolidation there. You will probably see a little more on our side as well. I think there are probably too many movie studios out there and you might see one or two fewer over the next five to ten years.
“But I think the next area of consolidation will be the gaming industry.”
The gaming industry’s pandemic boost has already seen a significant increase in mergers and acquisitions.
According to recent research by InvestGame, the value of mergers and acquisitions in the games industry exceeded $ 22 billion in 2020, including sales of ZeniMax to Microsoft and Codemasters to EA, which is the amount the highest since 2016. He said the main buyers in 2020 were Tencent. , Embracer Group, Stillfront and Zynga.
The report notes that because video games have outperformed many industries affected by the pandemic, public and private investors have started to target the industry as a perceived safe bet.
In its year-end earnings call in April, Sony itself said it would invest “aggressively” in its proprietary game studios during its current fiscal year (ending March 2022), no longer partnering with external game developers on exclusive games.
Sony has so far announced partnerships with former Stadia gaming boss Jade Raymond’s new studio, an investment in a veterans Bungie multiplayer game, and acquisitions of PC porting house Nixxes and UK studio Firesprite. .
The PlayStation company also invested an additional $ 200 million in Epic Games this year, which built on the minority stake it took in the company in July 2020, when Sony made a strategic investment of $ 250 million. in the company Fortnite and Unreal Engine.
“We intend to increase development staff and other internal costs by approximately 20 billion yen [$184m] year after year as we further strengthen our internal software, ”said Hiroki Totoki, Sony’s CFO, on the April conference call.
“To improve our software offering, we intend to continue to invest in partnerships with external studios, in addition to investing aggressively in our internal studios.”
He added, “As I just mentioned, we aim to strengthen the PlayStation platform through actions such as the recently announced partnership with Haven Entertainment, which was established by Jade Raymond, creator of the popular game Assassin’s Creed.
“In our additional investment in Epic Games, along with the rest of the Sony group, we will also work to improve the social and platform capabilities of games.”
Sony has worked more closely with its film business in recent years, following the opening of PlayStation Productions, a film studio tasked with adapting its game franchises for television and film.