Sony Group Corp (NYSE: SONY) recently recorded their most significant drop since October 2008, after Microsoft Corporation (NASDAQ: MSFT) ,its PlayStation competitor, announced a $69 billion deal to acquire games publisher Activision Blizzard Inc.
Sony Group’s shares dropped by 13% in Tokyo following the announcement. The recent acquisition escalates Microsoft’s investing spree to secure intellectual property assets for its Xbox Game Pass service. The recent acquisition wiped $20 billion off Sony’s valuation in a day.
Sony relies on high profile titles
Sony’s traditional console business model fails to attract paying subscribers who possess an overwhelming game portfolio. Instead, the model relies on high-profile exclusive titles and hardware sales, making up 30% of Sony’s revenue games and network services.
In 2020, the worldwide P.C. gaming market estimated its revenue in the U.S. was approximately $37 billion. In addition, the mobile gaming market estimated its income to be above $77 billion, which makes the company’s value to be around $70 billion, and the transaction is an all-cash deal for $95 per share.
The software giant has developed a Microsoft Gaming division led by a team that focuses on gaming across Xbox, P.C., and others. Big technology organizations expand by acquiring different companies or startups.
To prevent consumers’ data from being utilized for advertising purposes or in other parts of the business regulators may seek certain guarantees from the organizations. Other factors that led to the acquisition include the sexual misconduct fallout Activision obtained after several employees accused Chief Executive Officer Bobby Kotick of ignoring sexual harassment offenses in the company.
Microsoft discovered vulnerabilities in Windows
The company recently announced the discovery of new security vulnerabilities in its operating systems. During the release of its latest’ Patch Tuesday,’ Microsoft revealed that the operating systems were known to hackers before the company had a chance to respond.
The versions of Windows affected included Windows 7, Windows 8, Windows 10, and Windows 11 together with Windows Server 2019 and 2022. The company began to roll out its Patch Tuesday to its consumers and advised that the consumers resume and paused updates and gave a formula for those who wanted to trigger it manually.