Shares in Japan’s Sony Group fell 9% on January 19th after gaming rival Microsoft said it will buy developer Activision Blizzard in a record $68.7 billion deal for the industry. While Sony’s PlayStation is widely seen as having a lead in the generational battle with Microsoft’s Xbox, the purchase of the Call of Duty maker comes as Microsoft is aggressively expanding its Game Pass subscription service.
“Sony will have a monumental challenge on its hand to stand its own in this war of attrition,” wrote Amir Anvarzadeh, a market strategist at Asymmetric Advisors who recommends shorting the stock, in a note to clients.
PlayStation is a major source of revenue for Activision, complicating any potential decision by Microsoft to remove titles from Sony systems and squeeze its rival.
Many industry observers believe operability across multiple platforms is essential for the success of a metaverse where users can game, shop, and work freely as advances in cloud technology weaken ties to the bulky gaming hardware that made Sony and Microsoft industry gatekeepers.
(All information was provided by Reuters)
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