Sony "Vastly Overpaid" for Bungie, Claims Analyst

By Marc Deschamps
Last month, Sony stunned the video game industry when it announced its intention to purchase Bungie for $3.6 billion dollars. The move supposedly had nothing to do with Microsoft’s purchase of Activision Blizzard, but one analyst doesn’t quite buy that. Speaking with Yahoo Finance, Wedbush Securities’ managing director of equity research Michael Pachter said that the deal seemed to be made in desperation. Pachter compared the cost of the deal to other moves in the industry, claiming it was far too expensive for what Sony will get out of it
“Bungie went for $4 million per developer. And most deals are between $250,000 and a million. I’ve seen deals as close, you know, as high as $2 million per developer. This is crazy talk,” Pachter told Yahoo Finance.
“And 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. I think this was a statement that we’re not going to let Microsoft get ahead of us, so we’ll just buy something out of desperation. It’s not really a deal that makes a whole lot of sense to me. The others do.”
It would have been impossible for Sony to make that large a purchase within such close proximity to the Activision Blizzard deal. However, since the Bungie deal was apparently in the works for five to six months, it could have been a response to Microsoft’s purchase of Bethesda last year. Taking into consideration the revenue Bungie brings in, it’s easy to understand Pachter’s argument that Sony was desperate to match Microsoft’s aggressive approach and ended up overpaying.
Of course, it’s important to keep in mind that Sony’s intention with the Bungie deal was not to simply bring in exclusive development teams; Sony wanted Bungie’s expertise at creating live-service games. That’s an area where Sony is clearly lacking in experience, and the company wants to launch 10 live-service games by March 2026. Given the billions of dollars in revenue that live-service games bring in each year, it’s definitely possible the Bungie deal could pay off for Sony in the long-term!
Do you think Sony overpaid for Bungie? How do you feel about Sony’s interest in creating more live-service games? Let us know in the comments or share your thoughts directly on Twitter at @Marcdachamp to talk all things gaming!
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