Video game industry acquisition fever: 2022 has been a year filled with giant buys and some disappointments – Konami Group (OTC:KNAMF), Activision Blizzard (NASDAQ:ATVI)
By Flor Orsetti
The year when Sony Corp Group SONY bought Bungie, Microsoft Corp. MSFT took hold of Activision Blizzard Inc. ATVI and the giant group of kissers THQQF acquired over 5 companies, including IPs like “The Lord of the Rings”, is finally coming to an end.
In the first nine months of 2022, 976 purchases were announced or concluded in the gaming sector worldwide, according to the latest report from investment and technology bank Drake Star.
The numbers are in the millions, but what is the big picture?
All is not rosy in the video game industry.
Swedish publisher Embracer Group AB (which acquired Tripware Interactive, Eidos Montreal, Crystal Dynaics, among others this year) recently announced the closure of Onoma, a video game studio operating in Montreal, which may not be known to anyone but which is essentially Square Enix Montreal.
This team was known for creating the “Go” series of games for mobiles, with titles like “Hitman Go”. Nevertheless, the company recently announced to its staff that many employees would be transferred to a sister studio named Eidos Montreal and that another 200 employees would be laid off.
The shutdown is a shock and something unusual (even scary), especially because of the timing of it. Onoma was purchased in May; on October 10, a a new name and a new brand have been announced. A few weeks later, Embracer decided to shut it down.
Embracer, headquartered in Sweden, has focused in recent years on buying large and small companies in the video game industry. And while the news from Onoma is discouraging, not all prospects are.
In addition to the above, one of the acquisitions highlighted is the Argentinian studio Nimble Giant in 2020, which has only grown since then and has been able to expand to the point of opening offices in Spain and other countries. other Latin American countries.
On the other hand, Eidos Montreal, the remaining studio, is still intact but has had to deal with some budgetary adjustments. The closure of Onoma and these budget cuts are clear examples of how Embracer is looking to cut costs. Eidos Montreal reduced the scope of an unannounced project and closed another. What remains in force is their role as co-developer, since the company is expected to work with Microsoft in the development of certain games, including one of the “Fable” franchises, led by the British company Playground Games.
News like Onoma’s clearly prompts figures like Hideo Kojima to come out with clear statements on the subject: “As long as I live, I don’t think I will accept these offers.”
In the latest episode of “Brain Structure Podcast”, the Japanese creative assured that Kojima Productions is an independent studio and will remain so.
“We have no affiliation and are not endorsed by anyone,” he said. Kojima revealed that he received offers to buy the studio, but was very candid that he founded Kojima Productions “to work on what he wants to do.” .” As you’d expect for a studio run by a creative giant like him, some of the offers he’s received are ridiculously expensive.
It’s very likely Kojima is referring to creative freedom (when he claims he’ll do whatever he wants), especially after everything that’s happened with Konami Corp Group KNAMFwhich not only canceled “Silent Hills”, but also removed the classic “A Hideo Kojima Game” from the cover of “Metal Gear Solid V: The Phantom Pain”.
However, it is also true that many of these acquisitions mean a loss of identity for the studios, either because they are absorbed by other companies (as in the case of Onoma and Eidos), or because they are completely closed. Not to mention that in other cases, such as netflix NFLXmarket capitalization is the clear strategic approach and not so much the creative aspect, which Kojima champions so much with his auteur vision.
Netflix has acquired 6 studios so far this year (the most recent being lively fox, a few days ago). This is an unstoppable marathon that is part of its strategy to exploit the mobile gaming market to the fullest extent as it is the fastest growing market. segment in the world of video games.
The company started releasing mobile games in November 2021 and already has over 30 games available on iOS and Android.
2022 was by far the year of acquisitions in the video game industry, with deals exceeding $123 billion in value. The numbers speak for themselves and there is still more than a month. For these giant corporations, that’s a long time to keep doing business. However, the benefits of these consolidations are still far away.
The remaining question is: which video game studio is next to be bought? Whatever the answer, we hope for more successful cases and fewer Onoma scenarios in the future.