A shock! Rival Microsoft gambles on the game industry Sony plunges 13%

Southern Finance all-media reporter Jiang Yue Reported in Shanghai on January 19 that Sony, a manufacturer of well-known game console Play Station, experienced a shocking decline in the stock price of the Tokyo Stock Exchange, falling by 13% as of the end of the market. The night before, rival Microsoft announced that it would buy large game developer Activision Blizzard for $68.7 billion.

Activision Blizzard has countless fans around the world, and Microsoft's move is a huge sum, which makes the market worry about the decline in Sony's competitiveness, and Microsoft may remove many of Activision Blizzard's popular games from the Sony platform.

In terms of revenue, Microsoft will become the world's third-largest game company after Tencent and Sony after the completion of the acquisition.

Currently, Nintendo, Sony, and Microsoft are the three giants of the world with the ability to design and operate game consoles. Even if you are not a gamer, you often know a little about Nintendo's Switch, Sony's Play Station, and Microsoft's Xbox.

According to data from market research agency Ampere Analysis, in 2020, the global game console market sales were 53.9 billion US dollars, of which Sony, Microsoft, and Nintendo had market shares of 46%, 23%, and 31% respectively.

Consoles were born in the 1970s and first originated in the United States. In 1972, american electronics manufacturer Magnavox released the first console, Odyssey. The game console consists of an integrated circuit that forms a substrate with a simple controller and then outputs a video signal to the TV. Today's game consoles have become very similar to PCs.

However, Nintendo is more "closed-loop", its game content development and home-produced game consoles are integrated, unlike Sony and Microsoft, which need to obtain licenses from third-party game studios. As a result, Sony Play Station and Microsoft Xbox are more competitive.

After Microsoft released the news of its acquisition of Activision Blizzard on January 18, Sony fell 7.17% in the US stock market that day and 12.79% in the Japanese stock market the next day. However, Nintendo's stock price remained basically stable, falling slightly by 0.22% on the Tokyo stock market on the 19th.

Microsoft's acquisition of Activision Blizzard is not expected to be completed until 2023, as regulatory scrutiny awaits. Due to the news to Sony's stock price fluctuations, Microsoft game director Phil Spencer deliberately clarified to the market on the 18th local time: "We have no intention of letting Activision Blizzard stay away from Sony, and we are still committed to this." ”

Founded in 1946, Japan's Sony has a longer history of listing than many contemporary technology leaders, and the company was listed on the East Stock Exchange in 1958 and listed on the New York Stock Exchange in 1970.

At the beginning of its establishment, Sony started with the production and development of transistor radios, and now has six main businesses such as games, music, film and television, electronic products, semiconductor components, and finance.

In the second quarter of fiscal 2021, Sony's gaming business recorded revenue of 645.4 billion yen and operating profit of 82.7 billion yen, accounting for 27.2% of the company's total revenue and 26% of total operating profit, respectively. Regardless of the metrics, games are Sony's number one business, and the second largest business is electronics. In contrast, Microsoft did not specifically list the profit amount of the game business, but in recent years, games have led the Surface computer, Windows software, etc., with a faster growth rate.

In the official statement of Microsoft's acquisition of Activision Blizzard, Microsoft showed a high degree of optimism about the game market. Satya Nadella, chairman and CEO of Microsoft, said: "Gaming is the most dynamic and exciting category of entertainment on all platforms today. ”

Guojin Securities has previously released a report on the console market, showing that among the "Big Three", Nintendo has the longest history of employment, starting in 1980, followed by Sony, which debuted Play Station in December 1994, and finally Microsoft entered the market in 2000 and launched the Xbox.

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