Monday 31 January 2022

The battle for the future of video gaming heats up with Sony set to acquire Bungie

Sony has announced plans to buy Bungie, Inc., the video game developer which created the Halo series and now develops the Destiny series. The move is part of an escalating series of buy-outs as Microsoft and Sony compete to get the most exclusive titles on their consoles, the Xbox and PlayStation respectively.

Bungie was founded in 1991 and developed a series of successful video game franchises in the 1990s, including early first-person shooter series Marathon and strategy series Myth, as well as third-person action game Oni. In the late 1990s they began development of a highly ambitious, cutting-edge first-person shooter for PC called Halo. Microsoft thought the project was so promising that they bought Bungie in 2000 and repurposed Halo as a launch title and "killer app" for their new Xbox video game console. Bungie worked on the Halo series for the next several years, developing Halo 2 (2004) and Halo 3 (2007), both massive-sellers.

Bungie announced a split from Microsoft in late 2007, with Microsoft retaining the Halo IP. Bungie developed two additional Halo games for Microsoft after the split, constituting Halo 3: ODST (2009) and Halo: Reach (2010). Bungie pivoted to a new video game franchise they were developing, which resulted in the multiplayer-focused Destiny (2014) and Destiny 2 (2017). Both were immensely successful.

The acquisition will not impact on the ongoing release cycle for Destiny 2, with future expansions and new content being available on Xbox, PC and PlayStation. However, it is possible that Destiny 3, if it is ever made, will be a PlayStation-exclusive, as will any new IP to emerge from the studio. It also makes a possible future re-collaboration between Bungie and Microsoft on the Halo franchise unlikely, if not impossible. Sony will also be leveraging their muscle in the television and film production space to develop Destiny tie-in projects. Sony have also expressed admiration for the back-end networking technology used by Bungie in the Destiny games, which they may wish to incorporate into other Sony franchises.

This deal has been in the offing for months, and it is unlikely that it was a direct response to Microsoft's recent acquisition of Activision-Blizzard, instead more likely being inspired by Microsoft's acquisition of Zenimax Media and their Bethesda-branded studios in 2020 for $7.5 billion.

Microsoft's recent buying spree has seen them gain control of massive console-shifting franchises including Call of Duty, DiabloThe Elder Scrolls, and Fallout, as well as the well-respected Doom, Wolfenstein, StarCraft, WarCraft, Overwatch, Guitar Hero, Skylanders and Crash Bandicoot series.

Sony potentially getting the keys to future new Bungie IPs is small fry in comparison, but it might be a sign of Sony gearing up to buy other companies. If Sony wants to go toe-to-toe with Microsoft's acquisitions, an obvious target will be Take Two Interactive, the publisher and, via their Rockstar family of studios, developers of the giga-hit Grand Theft Auto series. Take Two is probably at the upper level of realistic targets, given that Sony's financial resources are somewhat more limited than Microsoft's, and Sony making the in-development Grand Theft Auto VI a PlayStation exclusive would draw in a lot of wavering fans who might be tempted to jump ship to Xbox (Grand Theft Auto V is the biggest-selling video game of the last decade). Of course, it might be that Microsoft are already targeting Take Two. Take Two themselves recently acquired mobile games giant Zynga for $12 billion, possibly a sign that they will not be interested in takeover offers, or possibly to bolster their price for any such offers.

It'll be interesting to see what the next move in the space will be.

1 comment:

MrSquiggles said...

Kudos to you Adam, I recall the post you wrote 18mths-2yrs ago (I think???) outlining the state of gaming companies at the time and likely merger options. None of us at that time would have assumed Microsoft would go so large, so that is a completely reasonable omission. but it was a great piece that I have thought about numerous times since I read it.