According to new evidence, Sony appears to be actively searching for studio acquisition opportunities. Since mid-2021, the Japanese gaming giant has r
According to new evidence, Sony appears to be actively searching for studio acquisition opportunities. Since mid-2021, the Japanese gaming giant has reportedly been on an acquisitions binge, with Ballistic Moon being one of Sony’s most recent purchases.
Microsoft appears close to completing its $68.7 billion acquisition of Activision Blizzard, the largest transaction of its kind in the history of the gaming industry. Therefore, the PlayStation manufacturer cannot rest on its laurels. However, the current console generation has seen it build a significant sales lead over its rival to the point where Microsoft openly admits that Xbox has lost the console wars.
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Sony appears to be in the market for additional studios, as evidenced by a recent job posting to bolster the company’s mergers and acquisitions team. The July 25 posting, discovered by Reddit user Zhukov-74, describes a managerial position in Sony Interactive Entertainment’s San Mateo, California headquarters. Sony is seeking an experienced economist or business administrator to assist the company in identifying “inorganic growth opportunities” through acquisitions, joint ventures, investments, or a combination thereof.
The newly surfaced job listing is insufficient evidence to conclude that Sony’s ongoing acquisition spree will continue indefinitely. Despite this, the advertisement is consistent with a recent report that Sony plans additional PlayStation acquisitions shortly. The Financial Times reported in May that the Japanese conglomerate is so determined to continue its aggressive acquisition strategy that it is considering spinning off its financial services division as a publicly traded company, citing sources familiar with the matter.
A partial spin-off on the stock market would enable Sony to raise additional funds for its acquisition war chest without incurring additional debt. As of March 31, the company’s total debt was approximately $30.5 billion, and its debt-to-equity ratio currently stands at 3.4, which, depending on the analyst, is considered average to unfavorable. The figure represents a 7% increase over the previous year when Sony’s D/E ratio stood at 3.6.
Given the size disparity between the two companies, Sony’s approach to acquisitions has always been vastly different from Microsoft’s. While Microsoft has frequently spent billions on high-profile acquisitions, such as its $7.5 billion purchase of Bethesda owner ZeniMax Media in 2021, Sony has recently demonstrated a propensity to acquire smaller studios regularly. Given its current debt-to-equity ratio, it would likely be risky to fund this strategy with additional loans, which may be why it is rumored to be considering a partial spin-off of its financial services division.
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