Only one month into 2022 and we have already witnessed one of the biggest acquisitions in the history of video games. Newzoo has shared some insights into the latest M&A activity, explaining how acquisitions of Bungie, Activision Blizzard, and Zynga will influence the market.

In January alone, Take-Two bought Zynga for $12.7 billion, Microsoft snapped up Activision Blizzard for $68.7 billion, and PlayStation acquired Bungie for $3.6 billion. These three deals are worth $85 billion combined, which is already more than total M&A activity across the games industry for 2021.

Key takeaways from the Newzoo report

  • In the third quarter of 2021, Sony was the second biggest game company by revenue with $4.3 billion. Microsoft ranked fourth with $2.9 billion. However, if we add Activision Blizzard’s revenue of $1.9 billion, the total earnings of the merged entity would have reached $4.8 billion, thus claiming the second spot.
  • Although the Activision Blizzard acquisition will strengthen Xbox’s positions in terms of revenue, this deal is not only about money. A huge catalog of big IPs like Call of Duty, WarCraft, and Candy Crush is a strong addition to Microsoft’s own library.
  • These brands will help the company boost its ambitions in the area of subscription services by turning GamePass into the ultimate content machine across multiple platforms. On top of that, King will provide Microsoft with expertise in the mobile market — the space Microsoft has been relatively unsuccessful in before.

  • Sony, which always had its own approach in the market, will definitely have to respond. According to Newzoo, “Xbox’s planned Activision Blizzard acquisition puts more pressure on PlayStation to expand its liveservice shooter footprint.”
  • By acquiring Bungie, Sony is getting expertise and talent rather than a valuable brand (Destiny) alone. The company hopes the studio will help it release 10 live-service games by March 2026.
  • Call of Duty will stay on PlayStation, but things might change in the long term. Last December, Warzone had a player share of almost 25% across PlayStation, Xbox, and Steam. The game was followed by CoD: Vanguard (11.5%), Black Ops Cold War (8.35%), not to mention the huge success of CoD: Mobile.
  • Sony realizes it has to add projects like these to its library, and the Bungie acquisition is the first step in this direction. In December 21, Destiny 2 was the 4th most popular shooter on Steam (a 3.61% player share), 7th on PlayStation (4.18%), and 6th on Xbox (5.37%)
  • Although these engagement numbers are nowhere close to the ones of Call of Duty, PlayStation could potentially use Destiny 2 as an argument for Microsoft to keep CoD on its platform.
  • Interestingly, Microsoft’s and Sony’s announcements completely overshadowed Take-Two’s acquisition of Zynga. This deal, however, is very important for the GTA publisher, allowing it to diversify its revenue and continue its expansion into mobile.
  • The Zynga acquisition will help Take-Two bring its core IPs to mobile devices and break into the top 10 biggest game companies by revenue globally. 

The full report can be found here.