Change title Only Western Developers are willing to Sell to either big 3, While Majority of Japanese don't care to sell to big 3

[DonFerrari]

VAMatt said:

Shatts said:

I completely agree. I understand acquisitions are a hot topic rn in the gaming space, but ppl seem to be confused that acquisitions are always good, or it's a must. I've seen so many examples where acquisitions and mergers end up failing, especially in the gaming market. The reason being the significance of chemistry. Nintendo seems to understand this really well, they only acquire the bare minimum and ones they are already well connected with. They've probably also seen plenty of examples in their long history in the gaming space. With a recession predicted to come in the near future, entertainment industries are more likely to take a big hit. At that time, acquisitions wouldn't be a plus for these companies, it's just a risk. I know a lot of people like to make it seem like companies are dumb, and yes they can be. But there's a reason why the successful ones are succeeding. Sony and Nintendo for example, don't have the kind of money Tencent and Microsoft has. Embracer group hasn't proved to us that their decisions are a success. There isn't just one answer, there are multiple answers. We need to think bigger about the effects of things, think outside the box as they say. It's not that easy I'm sure. 

The acquisition boom has been fueled by the very low cost of cash. On the one hand, interest rates were super low for borrowing. On the other hand, cash sitting in the bank was making very little money. Basically, cash in the bank was losing value to inflation. So, it makes sense for companies with a lot of cash, like Microsoft, to put that cash to work. So, that made big acquisitions. With the increasing cost of borrowing, and the requisite increase in the ability of cash in the bank to earn a return, acquisitions will naturally slow down.

Also, Microsoft has a very clear plan for changing the distribution model. It makes sense for them to have a lot more content that is completely within their control. It is not so clear that having all that first party content would make the same level of sense or Sony and Nintendo.  Basically, we're seeing a divergence in the business models, consequently, there's a divergence in the business practices. 

Yep a very on point explanation.