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EpicRandy on 13 July 2023
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SvennoJ said:
EpicRandy said:

You also saw a big ramp-up of studios being created since MS bought Bethesda. Those acquisitions are not what's cause consolidation, they happen because the time is propitious to investment in video game industries. The pandemic skyrocket the industry and now growth is through the roof and is expected to remain that way a least for a few years

There were also significant periods of consolidation in the video game market both in the 1970s and the 1990s. Can you say gaming in the 80s and 2000s was worse because of it?

All the growth is in mobile. Hence I believe this deal is to get an inroad into mobile gaming, using popular IPs and Gamepass to gain traction there. xCloud quality is plenty for mobile streaming but games will also be geared to be more mobile friendly to make it happen.

Yes, that's very the main component of the deal IMO, people view $70B and I think they unconsciously associate it with the console market due to AB's history before they added K.

During the FTC trial, it was stated by an analyst (not in the actual case but one following it if I recall correctly ) that King was bought for $10B and that ABK has grown the value of K like 5x since. This might have been an exaggeration but, the way I understand things King makes more than half of the $70B valuation. Also of the rest of the valuation, another 50% or so of CoD's actual value is also tied to Mobile which I believe is separate from kings value. That means the overwhelming majority of that $70B is tied to mobile. Someone can do the math and proper research, and this is only a wild guess, the nonmobile value part of the transaction might only be in the teens.

MS have barely any presence in the mobile space making all the valuation tied to mobile at 0 risk of creating an SLC, moreover, they want to challenge an established duopoly in this space which means competition and clear benefits for consumers.

That said the graph I have shown mentions Digital so I don't know if it excludes physical copy and create a skewed representation for mobile since mobile is by default 100% digital. Yet, it does not really matter since we know video game companies non-mobile included made records profits due to covid and it looks to have a lingering effect on the market still creating a propitious context for investment which was the point of the prior post.