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Thursday, March 23, 2023

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

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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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