Sony set social media alight when it completely overshadowed Gamescom Opening Night live 2019 with the acquisition of Insomniac Games, to the point where even Geoff Keighley felt the need to address it live on stage. It was a memorable moment, but until now, we have had no knowledge of how much the Japanese giant actually paid the Marvel’s Spider-Man developer. That figure is now reported to be $229 million.
The news comes as part of a recent SEC filing where it is stated that the sum was paid mostly in cash and is subject to change before the end of the fiscal year next month on 31st March 2020. It's a hefty sum of money indeed, but does the acquisition represent good value? Of course, Insomniac Games has already raked in the cash for Sony thanks to Peter Parker's 2018 outing and holds the development keys to the Ratchet & Clank franchise -- an important one for the hardware manufacturer as the next-generation approaches.
For context, Electronic Arts paid roughly $400 million to acquire Apex Legends developer Respawn Entertainment while Microsoft added Rare to its ranks following a $375 million cash injection. It is not known how much the team in green paid to acquire its most recent set of developers. When compared to the price tags associated with other studios, do you think this was a shrewd bit of business from Sony? Is Insomniac Games a bit of a bargain? Debate in the comments below.
[source sec.gov, via twitter.com]
Comments 51
That’s a whole lotta McNuggets
It's worth remembering that outside of Sunset Overdrive, Song of the Deep and some mobile titles, Insomniac don't have much in the way of actual IPs of worth. Sony earned that amount money from Spider-Man in about four days so it should worth it's weight in gold.
Hm... Not sure if this was a good investment. Other than Spider-man I don't think they had a huge hit and they tried quite a few times over the years. And Spider-man had... well, Spider-man.
Lots of resistance 💰 money.word up son
@naruball ratchet and clank series wasn't a hit?
SONY made 2.1 Billion in net profit last quarter. So they have the money to bet on them. I for one think it is a safe one.
I actually waited to play Spider Man - but when finally did, loved it. I will not wait if there is a 2nd one. Day 1
Not like Respawn owned StarWars. But they delivered a hit with it when EA needed it.
I think it was a great move for mindshare. Having a big and successful exclusive like Spiderman then buying the studio that made it just solidifies in the minds of gamers that Sony equals quality games. And since Spiderman 2 will be a system seller it was well worth money I think.
They got a high quality studio for a bargain price. Smart business 101 from Sony.
I think it’s cheap but as other posters have pointed out they don’t really own much valuable IP. Sony obviously already owns Ratchet, and Spidey belongs with Marvel.
Still, very good acquisition.
@get2sammyb I see your point, but how many "valuable IPs" did most of the MS acquisitions have? And they paid more than Sony did.
EDIT: Other than Minecraft that is.
So rachet and clank and spidey for 230...thats better than rare with...nothing for 350 lol. Considering they over doubled the purchase in just spidey sales alone. Id say good buy
U dont need to own any IP if you nail the games like that.
I’m definitely late to the Spiderman PS4 party, but holy cow pies, is it an amazingly fun game. Easily top 5 on PS4. They did well acquiring Insomniac Games...
It’s less about IPs and more about talent. I’m sure it’s not cheap or easy to get the amount of talent that’s in that studio. And Sony knows they will stay and deliver more hits for them.
We've seen Sony grow numerous studios over the years to the point where they're widely regarded as some of the most talented in the world. Naughty Dog and Santa Monica Studio immediately come to mind.
I'm not saying every studio Sony's ever bought or opened has been a huge success (it's closed plenty, too), but you'd think Insomiac has the track record to become something even greater with the right management and investment. Hopefully for Sony this does seem like a bargain in time.
I think the reason the price is cheap because insomniacs doesn't have any ip, their best games is nearly all sony owned ip (spyro, ratchet&clank, resistance, spider-man), and they didn't have good track record making good games with others company beside sony (beside spyro and sunset overdrive). It's a bargain aqcuisition for sony I think.
Also here's we see that what actually sony acquire is talent, insomniacs is very talented and efficient developers, I heard that they make r&c ps4 (which become their best selling games before spider-man) for only about 10 months which is crazy.
@naruball Huh? Spyro, resistance, ratchet & clank, and spider-man sells good, (and insomniacs spider-man sells way more than activision spider-man titles), for sony it's a bargain acquisition with that price.
Seems rather cheap in the grand scheme of things.
I don't think it matters that insomniac didn't have a 'massive' hit until Spidey.
Ratchet has always been a steady seller for Sony, if criminally overlooked (which i think will no longer be the case as a result of the 2016 reboot/remake). And the games have always shown off the immense talent of the studio - i thought Tools of Destruction on PS3 was a better platformer than Mario Galaxy for instance.
And the Resistance series showed Insomniac's ability to turn their hand to completely different genres competently and confidently. They were among the best shooters i played in the last generation.
And the VR experience they have built up on PC could be higely valuable to Sony going forward.
This is a highly talented studio. They will only get better as a result of greater funding and support from Sony. I'm sure they will flourish, and both parties will benefit from the arrangement
@wiiware Spyro is owned by Activision
I think it's a good investment. Cheaper because they don't own great IPs, but after Spider-Man, that series alone will bring in so much money. I have no doubt Sony will cultivate a fantastic new IP out of them next gen as well. With the long game in mind, Sony's proven to be wise with developers for the most part.
Considering what MS has gotten out of Rare this is an absolute steal and already a better deal for Sony eventough Insomniac hasn't produced a game as a PS first party developer yet.
Microsoft bought Mojang for 1 game, Minecraft, for 11x as much, $2.5B. That's a Billion with a B.
So yeah, I'm good w/ Insomniac for 1/11th the price.
They should bring Sunset Overdrive to Playstation, I think Sunset Overdrive would do a lot better on Sony's console's.
It's an incredible bargain!
Spencer spent 2.5 billion to buy Mojang 🤯
@Porco "huge hit".
They've had hits, just nothing huge like The Last of Us, Ucharted, God of War, Horizon, Gran Turismo.
@rjejr and look how well Minecraft has been selling since. That game is one of the most successful games of all time and it hasn't stopped selling.
@naruball
What happens when people get tired of Minecraft and realise there are even better clones?
The quest is! Does every employee get a bonus?? Or a piece of the cake?! That will be interesting to hear about,
An investment none the less. Great acquisition that will profit long term!
@Rob_230 Yes I know, that's why I said "their best games is nearly/almost all sony owned ip". And I believe acti own crash too.
Bring back Disruptor!!!
Sony used the money they made from the game to buy them.
... I reckon a "Resistance" remake / master is on the cards... still have fond memories of that... I remember getting Resistance, Motorstorm and Eye of Judgement... kept me going forever... ahhhh PS3 was something special...
I don't think the IP they have matters. Sony has bought a studio that almost exclusively makes good to great games. Okay, that Fuse thing that EA was involved in was a proper stinker. But otherwise they're golden.
Spider-Man alone is worth the price of admission. Imagine how much money Spider-Man 2 will make. And with bigger games making more and more money, Insomniac's profile will rise.
In ten years time this is going to look like a steal.
@naruball Spider-Man was a huge hit. I'm not sure where you go next from here. It is a smart acquisition, they are a relatively large studio, who can split into smaller teams if required. They also have VR talent which no doubt Sony will use going forward. And they have worked well with Sony in the past, it seems like a no brianer to me for that amount of money compared to other studio acquisitions.
They must had a mahoosive briefcase to hold all that cash.
I hope they are on a new IP.
Surprise us!
It's a lot of money, but they're talented developers, so it's likely a good acquisition for Sony's point of view.
@JohnnyShoulder
No wonder S. Layden was happy to make the deal.
Do you think there were two briefcases?
🤔
@crimsontadpoles I think the questions more did sony get a great deal? Has insomniac sold itself short.
The article quotes two other acquisitions at 400 and 375 million so the question is, is it a lot of money?
I agree its a good acquisition for sony though!
They have bought a great studio. But if you look at IP's most of them where ownt by Sony already maybe that affected the price?
@JohnnyShoulder Ha. My initial thought, too. But I think it just means they weren't given share options or anything.
I think this is a brilliant acquisition. Insomniac are a very talented studio and have had amazing success recently. And also, this further solidifies more exclusives for PlayStation.
@HUMPERDOO Love the Avatar and name. Nice to have another Preacher fan around!
@JohnnyShoulder Yeah, loved it! I think we could all do with more Humperdoos in our lives 🤗
Even if using the lower end of the range for Insomniac's annual estimated sales i.e. $50 million, Sony paying 4.58x sales to acquire Insomniac seems like a very reasonable price, if not a bargain (especially when considering the sales multiple other companies have paid to acquire studios, as well as the fact that Spider-Man made $200 million the first three days it was available for sale and has made over three quarters of a billion dollars in lifetime sales).
@naruball But it was still 11x the price for a very small company and I think the main guy left Mojang after MS bought it. Insomniacs in-house hardware alone was probably worth a substantial sum of money unless they've been outsourcing it all.
Minecraft did have Stories and Dungeons is coming, and I think the movie is still in production, but $2B is a huge amount of money. I dont' think $229 million is really all that much for a company the caliber of Insomniac w/ it's 25 year history of game making.
https://en.wikipedia.org/wiki/Insomniac_Games
Doesn’t sound out of line with either the cost of developing or the revenues generated by a single AAA video game. Suggest Insomniac weren’t getting much in the way of royalties from their previous projects.
I wonder if this sort of acquisition really makes financial sense? Okay, so they bought a small amount of IP, and probably an office and computers, but what makes the magic is the employees. If in an amount of time the really creative people decide to leave, what do you really have?
It’s like when Microsoft bought Rare, most of the original talent left to work elsewhere and MS was left with just the name and some IP they never use.
@rjejr You're right. I forgot about the hardware.
I don't think it's a lot of money. I just think people are overestimating them as a team in terms of profitability. They've done well, but not that well. I'm glad they exist, since I prefer their games over most other AAA games out there.
@naruball I only owned an Xbox One for about 8 months, bought it on clearance, traded it in for a Switch, and Sunset Overdrive was such a great game, and it's way down the list of great Insomniac games. Spiderman license was nice, but I don't think they NEED it to turn a profit at this price. We'll see.
@rjejr Another game that they made that was great, but didn't sell well. Quality, unfortunately, has little to do with sales, hence Platinum almost going bankrupt before Nier Automata. The kind of games that Insomniac make don't have massive appeal. I'm glad they got to do Spider-man, though, which enabled them to show their potential.
@naruball I still think Sunset Overdrive would have sold 3x to 4x better on PS4 then it did on X1. Not just b/c of the install base, but b/c it looks and plays like a PS game. It's the continued evolution of Spyro to Ratchet & Clank to SO. It isn't Gears of War or Forza, too cartoony for Xbox.
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