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Sunday, December 4, 2022

Sony ‘Vastly Overpaid’ in ‘Desperation’ for Bungie, Says Outspoken Analyst Michael Pachter

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.

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