Sony-Bungie, Microsoft-Activision: Analysts Think This Is Just The Beginning Of A M&A Spree In The Gaming Industry

Loup Funds analysts Gene Munster and Doug Clinton said during a discussion Monday that there is a build-up of urgency around the acquisition of gaming content after a recent flurry of mergers and acquisitions.

What Happened: The analysts opened their comments noting Sony Corporation’s SONY acquisition of Bungie for $3.6 billion.

The two analysts said more mergers and acquisitions are expected post the Microsoft Corporation MSFT and Activision Blizzard, Inc ATVI deal worth $68.7 billion. 

The duo also touched on the recent acquisition of Zynga Inc ZNGA by Take-Two Interactive Software, Inc TTWO as a precursor for more deals to come.

The “rush to acquire great gaming IP is not over I think that's the bottom line,” said Clinton. 

Clinton noted that Sony’s stock had fallen after the Microsoft news on assumption that the Japanese company would have to do a deal to build their stable.

See Also: How To Buy Microsoft (MSFT) Shares

Why It Matters: Clinton compared the recent M&A activity in the gaming segment and said Sony still has some catching up to do.

“This is a relatively small deal compared to Zynga at over 10 billion compared to the Activision deal, [which is] much larger than that,” said Clinton.

“I think I would even go as far to say I don’t think Sony’s done. I think Sony probably needs to do more here.”

Clinton said that he is not sure if it was the Zyna deal or the Activision deal but “but it feels like we've kind of hit that [M&A] spark now.”

“There's only so much really great gaming IP and obviously all of these developers are creating new titles, new games, everybody's going to continue to invest in new IP,” noted Clinton.

Price Action: On Monday, Microsoft shares closed nearly 0.9% higher at $310.98 in the regular session. The shares fell 0.3% in the after-hours trading. On the same day, Sony shares rose 4.5% to $111.66 in the regular session and gained another 1.2% to $113 in the after-hours trading.

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