Ah, Michael Pachter. The Wedbush Securities analyst has been providing commentary on gaming industry news for years — usually provoking irate reactions from fans of particular brands. Anyway, he's back again, and this time, he's got a pretty strong opinion on Sony's recent buyout of Bungie for $3.6 billion.
Basically, Pachter reckons that the acquisition is grounded in Sony trying to keep up with an ever-shifting industry. "Sony, I think, just did a me too statement and said, we're not going to be left behind. So we'll buy Bungie," he tells Yahoo! Finance.
Pachter continues: "Just to compare and contrast, EA bought Respawn about three or four years ago for $700 million with 400 developers. And those guys generate $700 million a year in revenue. Bungie does about $200 million in revenue. So I think Sony vastly overpaid."
Pachter's approaching this from a revenue point of view — that's kind of his job — without really factoring in Sony's potential plans for the future. Bungie may not make crazy amounts of profit right now — relatively speaking — but we know that Sony wants to significantly bolster its live service lineup. Early impressions are that Bungie will play a major role in establishing PlayStation's position in this space — but again, Pachter's all about the current numbers.
"I think this was a statement that [Sony's] not going to let Microsoft get ahead of [it], so [it'll] just buy something out of desperation," Pachter adds, in rather damning fashion. "It's not really a deal that makes a whole lot of sense to me," he concludes.
Indeed, it has been a somewhat tricky acquisition to pick apart — the kind of deal that we probably won't fully understand until we're years down the line. In any case, you would hope that Sony knows what it's doing. $3.6 billion isn't exactly chump change (unless you're Microsoft, apparently!), so as we've said before, it'll be incredibly interesting to see how everything unfolds over the next few years.
[source finance.yahoo.com]
Comments 152
almost everyone here said the same thing
Pachter coming out the woodwork again
Pachter says so many dumb things. Here are a few. 1) The Wii U would sell between 30 and 50 million units in its lifetime. 2)He also said the PS3/Xbox 360/Wii generation would be the last console generation ever back in 2009. He is wrong more than right and anything he says should be taken with a huge grain of salt.
They also got Insomniac for a steal so I guess the books have balanced out haven’t they 🤷🏻♂️
Don't the majority of people believe that as well?? I don't think it was a desperation move but on paper it looks like they've paid way to much.
I agree with him.
I can’t fathom how outsiders can think a company like Sony, who has been succeeding for the last decade with PlayStation, has no idea what they’re paying for or what they’re doing. They have a direction and vision and had this in the works for months. We’ll see the fruits of this over the next four years.
So this was a panic buy? Even though it’s been reported that this deal has been in the work for months? Ok.
I disagree with him.
Edit: Read this - https://blog.playstation.com/2022/02/02/hermen-hulst-talks-bungie-whats-next-for-playstation-studios/
This purchase won't make an impact right now, but down the road we'll see the fruits of it. Between assisting on PlayStation's other live service games and Bungie branching in to other media, there's a lot of money to be made here.
Wasn't this in the works for like 6 months? Not sure how long the activsion deal was going on for, but it doesn't necessarily tally up. I genuinely believe Sony know what they are doing.
How could it be a desperate move if this kind of negotiation takes months? At least Pachter's comments are entertaining.
I couldn't agree more. They paid a fraction of this for the much more talented Insomniac. It felt like a panicky overpriced buy from the announcement. Sony is so out of there element, and with poor leadership now it just seems like another bad move.
i dont think sony's buying them for what theyre doing currently it's what they're gonna do in the future.
While I do agree with him this time, can someone explain to me what this man does? Over and over again he just comes around, say a thing or two, getting the predictions wrong most of the times and not saying anything particularly interesting...
I don't get it...
@Ken_Kaniff just because insomniac was cheaper doesnt mean anything bungie is a household name simply based on the fact they used to make halo and not to mention destiny is a huge game
I don't understand it either. I could understand if they held a number of IP's that brought in a good amount of cash like Bethesda.
But instead they seem to be purchasing the "Talent" of the studio. But all it takes is for the people there to leave and move to another company or start their own.
I forgot this guy existed, I haven't heard him say anything in years. I don't think anything he has analyzed has been correct. And while I find this deal a bit odd I'm sure Sony has a reason for it that will become clear in time.
I trust in PlayStation's decision-making. They aren't always the best but if you're spending this much money, you probably have a pretty good idea about how much revenue Bungie is bringing in.
Same with Microsoft and buying Acti-Bliz, there's no possible way either of those IPs can bring in a significant amount of revenue to make that buy-out justified. I think it's safe to say both sides are playing it for the long haul.
Gosh, Pachter -_- Go home.
There's a new interview with Hulst on PS Blog and yes, they got Bungie cause of their expertise in live service, shooters and post launch content. Why Pachter is calling out anything now I don't understand. Kudos to him for succesfull ressurection though.
Pacht needs to work on the facts…
@AFCC He advises rich people on how to invest their money.
I like Michael Pachter, but often, the things he says publicly for free conflict with the paid analysis he provides professionally. In one of his Pach Attack videos on the now-defunct GameTrailers YouTube channel, he responds to listener mail about this very subject by saying he gets paid for providing professional analysis, which his public comments are not (paraphrasing).
I, too, am a professional financial analyst (not for the game industry) and personally think Sony overpaid for Bungie, but it's easy to say that from the outside looking in as none of us, including Michael Pachter, have any idea how much the facilities, technology, talent, IP, and everything else, including future opportunities, are worth. Those that do know, Bungie and Sony, thought $3.6B was worth it. Quite simply, the price someone is willing to pay for something IS its value.
@alexbolton2 Yea there a one trick pony. Destiny is just a Halo clone. Insomniac is a workhorse that puts out a variety of titles in quick fashion. The Bungie buy was a pathetic attempt to get into the live service market. The primary PS audience will not go for this and this expensive attempt to tap into that market will fail.
@Ken_Kaniff Do you really think a $3.6B acquisition just comes together in a week? This deal was in the works well before Microsoft announced they were purchasing Activision.
I don’t agree with him, but I don’t totally get this purchase and use of Bungie from what has been said so far. If to be true.
Now the Insomniac purchase, wow excited etc.
He’s talking absolute garbage about Respawns revenue. Between the studios forming in 2010 and being bought by EA they’d released 2 games and very likely hadn’t even hit $700M lifetime. Titanfall 2 was actually a major underachiever.
@mechayakuza Doesn't matter, they paid half of what MS paid for an entire publisher (ZeniMax) and a plethora of IPs. Sony is just so thirsty to get into the live service market that they were willing to pay anything for devs with that experience. In 5 to 10 years this desperate switch in culture will blow back in Sonys face.
How is this bloke still relevant? He really rates himself and loves the sound of his own voice a tad too much..
This purchase is a colossal waste for a PlayStation owner. PlayStation owners get no exclusives or any other advantages over others and instead lays the groundwork for Sony to move into live service games, something the vast majority of PlayStation fans object to.
And they only paid $229M for Insomniac. Which with Spiderman they probably made that back in a few months.
One of the things I think people (like him) aren't seeing is that Sony is bigger than videogames and that they likely have an eye on developing content like TV shows or movies within the Destiny brand, along with other future Bungie properties, that could help make them far more valuable than just a videogame developer. Bungie themselves called themselves a multimedia company in the announcement. I think they want to move in the direction Riot is currently going with its broadening of the LoL IP.
@Shepherd_Tallon
I agree with you.
And Activision blizzard make about 9 billion a year, so did MS overspend too?
D2 makes around 200 to 300m a year and will be boosted by its next expansion too, plus people are assuming that Destiny is the only thing that Bungie will make in the future. Spoilers...it won't be and I got a feeling that Sony looking at their new IP will have been one of the reasons they wanted them.
So it must've been a good deal then. Noted.
Who?!
Maybe they did, maybe they didn't. Personally I think MS spent way too much for Activision Blizzard but that's just my opinion.
I think the desperation line is incorrect, this deal wasn't done overnight.
First time I agree with everything Patcher has said, guess after being wrong for so many years he was due even though it's kind of obvious what he's saying.
why everyone still listen to Michel Patcher? everything he state is always wrong.
The one benefit to a Pachter comment is that you'll know that the exact opposite is true. Funny to see that now that he's finally not railing on Nintendo for once some people will go "y'know, NOW he's totally making sense!"
Sorry I have to say I agree with him…
@Ken_Kaniff you’re always my favorite poster here. The level of drama at which you write your posts is legendary.
Anyway, I don’t know what to make of it. Opinions are opinions. When MS bought Rare people raved and that acquisition flopped. Bungie is a talented studio but it has not made any noise in the game in a while. Also, it’s Sony so who didn’t expect doom & gloom and negative press.
Destiny is not the kinda Dev they would get out of a panic. You don't think Sony could have gotten a first party exclusive dev for 3.6 billion? This was strategically planned long before MS announced Activision buyout and it goes beyond Destiny 2's current revenues. It's a gamble nevertheless but so are the acquisitions Xbox made. There's no guarantee they will get the return MS wants. What if some new shiny exclusive gaming tech comes that completely renders games on current consoles outdated. What if people flock to a some fortnite level new sensation that it not on either console. Anything can happen really with the way tech evolves.
@bimboliquido "Genuine question: has he ever been right?"
Yes! right now 😁 and I do think it was a desperation move but people are thinking Blizzard while some of us are really thinking it was a response to Bethesda.
@Ken_Kaniff 1) it's you're* not your 2) can I please have whatever you're smoking because you have to be trolling there's no way one person can know so little about anything while simultaneously pretending to be an expert please give your head a shake.
"EA bought Respawn about three or four years ago for $700 million with 400 developers"
Yeah but they bought them BEFORE Apex Legends. How much was EPIC valued at before Fortnite?
Captain obvious over here.
Only stupid people think it's a desperate move.
This has been in the works for 9+ months, since before lockdown to be precise. That's not desperation.
Sure the price may have went up after Activision were bought but Sony were going to buy them regardless.
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@JJ2 I don’t agree with Pachter but it’s news therefore should be reported. You can’t just control what news is reported so that you only see the positive stuff.
I think this is a fair take given what we know, but I think it’s what we don’t know that might have been the deciding factor. What does Bungie have up their sleeve? How far back has this partnership been brewing? That would make it more of a gamble than an overpayment.
@JJ2 don’t blame Push. The connect is solid and leads to debate. Just because you don’t like it doesn’t mean it’s bad.
Funny, wedbush securities overpay michael pachter
(Seriously though, time will tell if this is a wise investment)
@nessisonett EXACTLY!!!
Sony purchases arguably the only ONE Microsoft developer responsible for keeping XBox in business (and profitable…and relevant) for 20+ years in an ever-changing, ever-evolving, cut-throat industry, and Pachter thinks this is a bad buy? Hmm…I don’t think so.
Did Sony overpay? Well, it’s true they don’t get the license to Halo or the ip, but they get the juggernaut company that’s SOLELY responsible for Halo franchise, and that fact can’t be understated. A company is only as good as its employees, and there are 800+ of video games’ finest in the world now working to make Sony even better and more successful. That’s a big win. And, considering Bungie’s still going multi-platform with future games, it’s a win for the entire video game industry.
@get2sammyb
You agree that Sony ‘just buy something out of desperation, ‘ ?
That’s a childish way to see it. It could almost come up in some console warrior argument 🤪
@AhmadSumadi
Pachter has always been a joke for years and only leads to clickbait non sense. It’s not new.
A lot of the 'overpay' of the buyout cost seems to be related to the employee equity buyout and significant paydays to employee shareholder as part of a retention programme over the next few years. Basically, the cost is not only for the studio, IP & staff, but also to ensure retention of the staff
@ChrisDeku Yeah that's what I thought when I was reading this article. They bought Respawn in 2017. Apex Legends legends released in 2019. They hadn't released Jedi Fallen Order either. Respawn would be a lot more expensive today.
It's no $70B though.
It is a lot of money that Sony put down. But as sony are looking at multiplayer games now-I think bungie bring in a lot of money from destiny. So any new multiplayer games that bungie make in the future -will bring in a lot of money for Sony- from which Sony have no track record in really. So short term it’s seems a lot, long term is where it will be beneficial for Sony.
100% overpaid for essentially one notable IP.
EDIT: And even still, they will remain mutliplat.
They paid for growth. They paid for expertise in the service game space that can be shared with their other studios. And they are still getting multiplatform profits. I’m not going to pretend I am a financial genius, but I know Sony are experienced in these things and cautious with their money. It’s also clear these deals weren’t done in response to the Activision acquisition, it would have taken far more time to get everything negotiated and signed off
Maybe they bought Bungie from a scalper?
I'm so glad Pachter isn't running PlayStation or any other gaming company.
Up until now all studio's Sony bought are high quality and have a place in their organization. Bungie isn't going to be any different.
I agree Sony did overpay but I also think they made themselves a good investment for the long run. A lot of shooters have failed to reach CoD levels. Titanfall is the closest thing to having another CoD-alike game and look how well that turned out. Destiny is big even if most of us here don't like it or hate the decisions made for it. It's one of those games you can hate and yet you can't stop playing or keep coming back to. Sony has secured it so they will make good money from all platforms going forward and they don't need to worry about another company snatching them up.
We all know Bungie for making Halo so their name alone will carry success. Whatever they make in the future, fans will run to it because of Bungie alone. And Sony can make all the TV shows and movies out of Destiny. They also get experiences from them that could help them with other games.
Whatever Michael Patcher says, the opposite is always true.
Even though I thought sony overpaid, because Patcher said the same I now believe Sony got an amazing deal and were masters of negotiation.
It was a panic purchase THAT WAS THE RESULT OF THE BETHESDA FAMILY PURCHASE and I’m sure at that time Sony knew Microsoft wasn’t done purchasing. None of us knew Microsoft was attempting to buy Activision but is it so hard to believe that Sony had some insider info about their competition?
I’ve worked with companies in different fields that had similar insight to what was coming in regard to competition. Many times, these companies are very aware of each other’s business. I was in the foods and logistics field.
OMG. Patcher articles. We're back to Patcher articles. It's WiiU. It's PSVita. It's the past repeating. That's it, PS5 is finished. Game over, man. We know it's the end of the line when NLife/Hookshot (WTF did NLife become Hookshot, anyway?) starts covering Patcher.
ahem.
He can't possibly think this deal was thrown together in a week, can he? I mean, I know he is used to just shooting through his mouth whatever enters his head as fast as he can, but I don't think bureaucracies can do that.
But, he's also not too far off the mark. I don't think it has a thing to do with a reaction to the Activision deal, or even Bethesda, but I think it has more to do with Sony trying to cash in on the trends and not get left out, probably leaning more into the trends of Ubisoft and close partner Rockstar showing they can make far more money off the biggest PS games going mtx/service than retail, and imitating their partners, recognizing they have no experience or knowledge of such things and being able to absorb one of the biggest. It's more a sign of Ryan doing the usual "big media exec" thing and just copying what works in the industry.
I think it's also intended as a message to investors. A $4b message that says Sony's positioned for the future of profitable industry trends, especially with competition from MS, sure, but largely the same competition MS keeps warning about from Tencent/mobile, Facebook etc. I think it was partly a statement intended to reassure the finance wing that the "big data" tech companies (excluding MS which is also fighting them) isn't getting ahead of them as much as it looks.
I'm still calling it now (as I've called in other articles) Sony will be talking positive of an NFT business within the next 6-12 months, guaranteed. Not doing so will be a pressure point for investors.
Guess even a broken clock is right twice a day.... Buying Bungie for half of what Microsoft paid for Bethesda is stupid
This pretty much explains it all
https://twitter.com/Mr_Bluepoint/status/1488663064354476033
@JJ2 I don't think this was desperation, but let's not pretend companies never do anything out of desperation.
Honestly this is one of those things that all us armchair analysts can't really have a full view of. We just aren't privy to all the information, just a tiny portion of it.
That said on paper this initially looked high. But then so did ABK. And Insomniac looks like the bargain of the century.
I find it far easier to assume that Sony aren't going to knee jerk spend $3.6 billion and have a strategy than believe Pachter. He throws enough s**t at the wall that some sticks but he's wrong so often.
@thefourfoldroot agree. If this was a panic move to match Bethesda or Activision buyouts they would have spent perhaps a bit more on a publisher to take games from Xbox. This is clearly at least to some extent an investment into the resources they felt they needed to drive their multiplayer/live service ambitions. It's a long term gamble but it is not a panic move.
More philosophically, who actually has a reason to care if Sony overpaid or not? Whatever price they settled on is obviously not going to be something that'll put Playstation at any risk of bankruptcy, and having billions of dollars sitting around idle in corporate war chests does nobody any good.
It's telling that Pachter is the one complaining about this, because the only ones with their knickers in a twist over it should be the parasitic investors who might otherwise have been able to wet their own beaks in Sony's sweet, sweet profits. Us gamers, frankly, shouldn't give a flip what they paid (in a good way).
This is one of the rare times I completely agree with him.
Basically this confirms Sony made a good move, because Pachter never gets it right. Ok, moving on..
@Rubssi
Some good info that helps make sense of this acquisition. Thanks for posting that thread.
They may have overpaid but at least they’re making moves to combat MS’s greedy attempt to monopolise the industry, which is a good thing.
It’s interesting that MS’s acquisition of Activision and Bethesda wasn’t deemed a ‘desperate’ act by a company that was being trounced by the competition for the past 10 years. But this is.
Okay…
Just a friendly reminder:
"The 3DS will prolong the handheld market for the game manufacture, but ultimately I think handhelds are in trouble. After the 3DS has had its little rush, handhelds are going to continue to decline.”
-Michael Patcher
No think Sony paid the right amount especially since Sony are really cranking out the films. I wouldn't be surprised if they make a trilogy movie out of destiny and/or tv series to rival star wars/marvel . As Sony is thinking long term not just games. Although I'm not a fan of bungies prices; ive been a destiny fan since day 1. Wouldn't be surprised if there's spin off like destiny racing or anime/manga
Same guy who said PS3/360 was going to be the last console generation. He deserves no ones time lol
They definitely overpaid for what is technically 1 meaningful franchise.
Whether or not Bungie can or do make tons of amazing games in the future is irrelevant when it comes to amount Sony have paid for the current business.
Talking about a 700 million dollar Respawn deal from 3-4 years ago...is BS. There's been massive inflation from financial upheaval, stimulus, & COVID. In the retro game market, everything is double pre-COVID prices and more if you go back further. Breakdown the Activision deal from 2022 with 68 Billion per # of developers...
It's pretty difficult to take this guy seriously. Revenue is not the only reason companies acquire each other. As Ryan has said there is the expertise in GaaS games Bungie brings that attracted Sony in the first place. And considering Sony is interested in getting some GaaS going it makes perfect sense to me.
@Jaz007
Sure. Let’s not have a straw man argument about generalities about ‘desperation’ though.
What he said is clear and is stupid in this particular case that Sony ll just buy ‘something’ out of desperation. Case is clearly documented btw.
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Inflation and cash on hand is another factor. If your money is losing 5-10% due to inflation, you might as well buy something that will spur growth of your business. Not to mention it generates revenue too.
Ya they overpaid but it's a seller market and they gotta scoop up a big FPS player before another company does, that being said Bungie has potential with it's upcoming game coming and evidently their expansions are doing decent, and they should be pretty knowledgeable on the games as a service front
Michael patcher is and always will be a completely unreliable ***** artist with no credibility
@Salt_AU I understand, just wish for something better, btw your comment above that is spot on. Activision is a dumpster fire from the top to the bottom of that company.
If the acquisition deal actually forces Sony to keep the studio entirely independent, it feels in the surface that they did overpay.
But the more I think about it, the more I feel that this is more about Destiny IP rights. They now get to make animated shows, motion pictures, TV shows, you know, the works, with the Destiny IP. THAT might be worth the 4 billion to own for Sony, plus the IP will continue to generate money on its own.
I actually feel this was not PlayStation or Sony Interactive Entertainment doing the acquisition, but parent Sony doing the acquisition.
@Tharsman That's an interesting, unique take on it, but would be very consistent with Sony history. They're a lot more ready to buy multimedia franchises at a corporate level than additional production assets.
How much will restraining orders for Marty cost, though?
I expected this out of DSP, but not someone that actually does this for a living. Who am I kidding? I knew Pachter would slither out and get it wrong again.
@Ken_Kaniff
You’ve got the making of a Michael Pachter yourself with your crap predictions / analysis. Keep it up I like a good laugh.
@truerbluer "something the vast majority of PlayStation fans object to"
People who comment online =/= most PS fans
I dont know if buying Bungie was a good idea, but I do know I don't care what Pachter has to say about it.
Instead if another studio, how about a firmware update to allow 1440p on the ps5.
So how about Microsoft's Activision purchase? I'm sorry but no company is worth $70 billion unless it's a massive powerhouse like Disney, and that's mainly because of the amount of real estate the mouse owns in several different mediums.
Great to have so many business experts here. It would be cool to see your methodology for corporate valuations.
What an idiot and anyone who believes him is too! stfu and gtfo the internet with your dumb opinions! The talk of buying Bungie happened many months ago!! It's MS who are desperate buying 2 trash companies and massively overpaid for them! And they are still behind Sony. So everyone just stfu cuz u don't know anything!!!!!! Don't need 1440p!! If you have a PS5 and not a 4k tv you are a massive cheap idiot!!
I mean Bungle has created two of the most well known FPS IPs of the last 20 years, so they're doing something right. Are they worth $3.6b? I have no idea, but as this article and every other one online has stated, we don't really understand what the deal's true purpose is, other than hoping Bungie can help Shepherd all of Sony's live service plans.
"EA bought Respawn about three or four years ago for $700 million with 400 developers. And those guys generate $700 million a year in revenue. Bungie does about $200 million in revenue."
Respawn current estimated annual revenue is $172.3M per year. Where as Bungies current estimated annual revenue is $254.4M per year.
I think Bungie is more than Destiny, and I guess Sony does too.
What do I think? I think when you start talking about silly dollar amounts, I lose any way to relate or have an informed opinion. Trying to comprehend billions of dollars might as well be a gazillion...it's pure fantasy to my mind.
Like others have said, it seems like a relative bargain compared to activision. Though all these numbers seem high to me. Bidding wars maybe?
From sonys point of view though, adding a decent, popular fps company was a good move.
So who’s telling the truth him or the guy that says Sony has been talking to Bungie for 5-6 months.
The Harry Maguire of Corporate Acquisitions
@NEStalgia got to say not sure why its a unique take (i mean, why it is not mentioned more) given that it was part of the press release.
"Today, Bungie begins our journey to become a global multi-media entertainment company."
I’m not sure they did overpay.
Whilst Destiny 2 might be about to collapse under its own weight in barely understood menus and lore the gunplay is still the benchmark and the game plays incredibly well.
Bungee said they are still multiplatforn but that could just mean PS and PC.
@Ken_Kaniff Then again all IP's where practically owned by Sony soooo.
@NEStalgia If the Switch would have been a handheld only im certain it would not have sold this good. They just made a awsome product but its a hybrid and thats what so great about it. Im certain if you would release a cheap hybrid PS2 that i will sell like crazy its just a cool idea.
It was planned half a year ago, so not out of desperation, but definitely overpriced. Comparing bungie to others, I think it isn't worth even 1b.
@Flaming_Kaiser That's a triumph of marketing more than anything else. Switch Lite is basically a Super Game Boy Advance HD. Switch is the same thing with a TV out and detachable controllers (and bigger screen.).
It's great, especially the OLED is finally the Vita I wished Vita could have been, but realistically it's an awesome handheld with a tv out. Marketing makes it "hybrid" .
Your PS2 idea reminds me of the Sega Nomad though. It was literally a Genesis in a portable body!
@Squanch you're welcome
They're now reporting that 1/3 of the purchase price is going to the employees in the form a retention incentive program. Sounds more like Sony paid a fair price and wanted to keep the talented employees there. I applaud that.
@bjorn_oakenstream
Indeed I just read that.
So it's confirmed once more Pachter has no idea what he's talking about. What a surprise.
@Rural-Bandit Why change a winning team they would be stupid not to go with the Switch 2.
Yeah well that's obvious. But Pachter is wrong 95% of the time.
Fans trying figure out if this will be a good or bad business decision by Sony is madness level futurology. I hope it isn't for Sony executives.
It can both ways, I guess? But it is far from a clear win like was the acquisition of Housemarque and Bluepoint.
why does any one care about what this guy thinks , he's been wrong so many times.
@twitchtvpat he is right about this one.
@RenanKJ it was desperate because it was likely a shallow response to the microsoft-bethesda acquisition a year ago. i find it absurd how anyone can try and justify bungie for $3.6b when sega and capcom are valued in the same ballpark, both of which own dozens upon dozens of beloved IP and would be far more rewarding for sony (if they were up for sale, that is a different discussion.). bungie is a giant 乁(ツ)ㄏ from most of the gaming community, myself included.
The word analyst tells you all you need to know.
@get2sammyb you agree with him either because you want to generate engagement here, like this one or you honestly think he is right.
And the pachter dude is right if you take these numbers and put them in a jar. But imagine this: after bethesda and AB acquisitions, MS turns around and while farting accidentally aquires Bungie. How much is that purchase worth to Sony now? It's priceless. 3.6 B is nothing when you're hanging by the skin of your teeth (FPS wise). Pachter and you should get a room, dude.
@Ken_Kaniff They've been talking to Bungie for 5-6 months, which you'd know if you actually cared to do a tiny bit of reading.
I hate to say this but I definitely agree with the dude for once.
Sony obviously over paid, but who actually gets an acquisition at cost? There is a level of Goodwill that goes into purchases to help incentivize shareholders to part with their shares. Although they weren't publically trading, the same rule applies for Bungie. Bungie was worth about 2-2.5 billion pre-acquisition. Using the Activision acquisition as a comparison, Microsoft paid 40% (approx over the valuation of the time) in the buyout. If that were the case, 2-2.5 billion x40% markup = 2.8 - 3.5 billion dollars.
This lines up with roughly the purchase price Sony paid for Bungie.
The main takeaway of this acquisition for Sony is three part from what I read surrounding this deal:
1) consistent revenue stream : Bungie makes 200-250 million in profits year over year. If nothing else changes, Sony will have made their money back in about 15 years.
2) Bungie are a leader in the FPS and live gaming markets. SIE first party studios gain quite a bit of intrinsic value from the knowledge they bring to the community. Especially if the rumoured second studio of Guerrilla is believed to be making a Multiplayer game (possibly Killzone), they'd gain immense value, improving on the Lore and feel of the gun/shooting mechanics.
3) Bungie apparently was working on some next generation technology, Sony was reportedly impressed by whatever it is, that Bungie was working on. My two cents say that this has something to do with VR technology, and Sony wants to really nail the PSVR2 this coming year. Whatever this tech is, Sony is looking to future proof themselves moving forward.
All this to say, the value is more than meets the eye. I am glad they are remaining a multi-platform studio, but I can see why Sony was so interested in them, especially with these uncertain times, full of huge acquisitions. Better to lock down some talent under your studio's umbrella whenever possible.
@Tharsman
SIE gets some stuff out of this deal, too. They get access to Bungie’s in house engine as well as access to 800 talented employees who can assist the multiplayer PlayStation teams in building multiplayer live service games.
Something that needs to be thought about is that Sony hasn’t released a AAA multiplayer focused title since the end of the PS3/early PS4 era. A lot of that talent has moved on to other endeavors.
Bungie was a good buy. I was apprehensive about it at first and felt like Sony overpaid, but having had time to think on it I feel like it was a good call.
@CrushALL
Some people prefer to play on computer monitors.
4K is a waste of money for someone playing on a 27 inch monitor. At that size, you save half the money getting a high refresh 1440P monitor over an equivalent 4K monitor. And being such a small screen means that you won’t be able to tell the difference.
Plus a lot of people share their monitor between a gaming PC and a PS5/PS4. And gaming PCs are pretty much optimized for 1440p at very high frame rates today. Not many people build rigs to play in 4K.
@AFCC I do wonder who pays this dude and why, also why do people give him air in the media.
@NomNom Great analysis there. For sure Sony overpaid. Acquisitions require extra money to turn the heads of the owners unless they were already on the path to acquisition anyway. 250 million was a steal for Insomniac, then again they didn't have any IP. Insomniac would have sold for much more to Microsoft and they have also grown immensely under Sony. The rules of the game have changed now and companies are just more valuable based off of market growth and the M&A premium. Respawn 4 years ago is not Bungie today, but I'd imagine that the values of both are roughly the same today. Personally I'd rather see Sony buy Sega for the money that they spent on Bungie, but this move makes perfect business sense. They still could buy Sega. I wonder if Sony have considered buying just a percentage of Sega or Square or buying into a studio like Ru Ga Gotoku Studio or Luminous Productions to co-run as a partnership.
He is like some of those populists who pretend they are no politician but do politics and keep saying the most idiotic things. They play dumb thinking they are clever whereas they are actually really dumb. Somehow sometimes it plays into ignorant bias confirmation and you end up with millions of people electing the most idiotic leaders ever on the planet.
I mean come on. The press has made headlines about this fraud for ages and we pretend he is ‘news’ in 2022. 🙄
He doesn’t even have the excuse other well known frauds have of supposedly reporting mysterious’ people in the know’ sources. It’s his own stupid thoughts.
Although the numbers don't stack and point to a rushed acquisition, I'm hopeful that it's the future that is being planned for here where money can be used to make Destiny better and also for the talent to be able to work on others projects and hopefully bring out another great fps. I'm also confused because I saw that this buy out was in the making alot longer than the MS/Activision buy out??
Thing is they have one single IP. You can say they bought the people, but in gaming a lot of it is the design team and there is not not much stopping the leaders taking their new $B and moving on. They will probably have 12 months fixes in place but little else.
@NomNom Exactly as you say.
On top of that, roughly 1 billion of the deal was added on as employee incentive.
Sony really really wants Bungie's staff and tech for their other projects.
The IP is just the cherry on top.
Sony want to have gaas games and it's developers talent, so it's less of an ip buy but a talent buy. I think sony want bungie to teach their expertise about online gaas games to sony owned developers.
I buy sony consoles for their single player games, so I don't like the fact that sony spend so much money on gaas developers.
@Ken_Kaniff Their*
I honestly don't think Sony overpaid in current market.
But boy oh boy, it paints Bethesda acquisition in pretty picture. 8 dev studios, Fallout, The Elder Scrolls, Wolfenstein, Doom, Quake, Starfield, Prey, Indiana Jones etc. for 7,5 billion vs. one studio, Destiny and new IP for 3,6 billion.
@Godot25 plus Bethesda will make console exclusive games for MS, unlike Bungie.
@Porco "both of which own dozens upon dozens of beloved IP and would be far more rewarding for sony"
Beloved or not means nothing. How much revenue do they generate?
This guy is ALWAYS wrong, and has never been able to see beyond his nose.
I've been disagreeing with everything he says for decades and he leaves a huge legacy of always getting it wrong behind him. It amazes me that he still manages to get anyone to read his analysis at all.....
Like anyone without vision, his analysis is based on current projected profits only and he clearly hasn't got the vision to see what this means for PlayStation studios in the longer run. Its clear to anyone with half a brain that Bugie have the best skills in the few areas where PS studios need some help. This is a far more valid purchase than simply buying up some cheap stale IP's to keep it off the other platform - nobody wants that. We can also expect to see a Sony studios produced Destiny series - it will come.
Sony have consistently proved they invest in the right resources to provide the best games and have a long and rich history of making sound acquisition decisions. Contrasted with Pachster's history of never understanding anything, I know which horse I'd bet on.... xD
While i do agree, first, Respawn had no big IP in their belt.
Second, it seems bungie is in a pretty big expansion, becoming a multi-game studio, much like Insonmniac.
The issue to me is how they say their games will always be multi-platform.
It sure sounds weird.
With that said, MS overpaid for Activision too.
@naruball enough to keep them successful for 30* years, not to mention all the merchandising deals on top of game sales
*more like 61 years and 42 years respectively. you do realize that a big factor with an acqisition is the IP you get back as well as potential revenue associated with said IP? also, i doubt bungie and its single IP is more successful than the entirey of sega or capcom even as we speak right now
@Apfelschteiner I kinda dislike the guy. He just spews nonsense and I see articles about him since I read Gamespot and IGN, which was like 15 years or more ago lol
@get2sammyb ah, so nothing? Got it.
Reminder that this guy is an idiot with no respect for the dead.
The comparison he makes is ridiculous. I'm in IT, and the single worst issue in this industry right now is talent scarcity. The reality "three or four years ago" as he puts it was totally different. Sony is obviously buying talent here above all, which in Bungie's case is clearly abundant. Whether it's worth the full 3.6 billion is up for debate, but the only fair comparisons are the deals made in the past 12 months or so. But don't be fooled: these figures will keep rising for the foreseeable future.
@Sakisa No respect for the dead? What do you mean?
@Apfelschteiner A bit after Satoru Iwata died, in a later video he derided him as 'the late and not so great' Iwata in a dismissive manner.
I agree, 3.6 billion for one studio is stupid, they bought insomniac for 230 million, they could have bought about 8 studios for 3.6 billion
@TripleKing333 And the media never lies to paint a positive picture for their corporate lords ?
@Sakisa If he wanted to talk ill of the dead, he should have picked someone who was not widely praised and loved and a man of the people who was a true gamer.
Michael Pachter also said Phil went under the desk during MS's acquisition.
@Rural-Bandit But then again because they think out of the box you get quite some unique stuff. How funny would would it be a Jak and Daxter crossover with Rachet and Clank. 🤪
@nomither6 and what is that?
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