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Forums - Sony Discussion - Should Sony acquire another less expensive developer? Since Square is really in good terms with Sony?

kazuyamishima said:

So... Sony is Doomed?

Depends on your definition. They aren’t going anywhere as a business, but their days as the undesputed market leader are probably numbered 



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aTokenYeti said:
kazuyamishima said:

So... Sony is Doomed?

Depends on your definition. They aren’t going anywhere as a business, but their days as the undesputed market leader are probably numbered 

Hard to say.

A lot of SIE's future is completely unknown.

For all we know, their decision to pursue MP games from Haven, Firewall and Deviation (SP too) could end up being more than enough to make up for the loss of the likes of CoD. 



aTokenYeti said:

The level of risk you incur with a stock based transaction is significantly higher than a cash deal, and leave Sony as a whole more vulnerable to fluctuating market conditions. To acquire a publisher via a stock or debt transaction when so many other Sony ventures require capital would not be ideal for Sony leadership and would frankly be an option of last resort 

Its not ideal, but Microsoft just spent nearly 70B on Activision Blizzard, why wouldn't Sony prioritize the Playstation division now? Every other division but Sony Interactive has got a major investment in the last couple of years: 

Sony Financial Holdings (3.7B)
Sony Music EMI acquisition (2.3B)
SonyZee merger (1.6B)
Crunchyroll (1B+)

Sony even invested 9B+ towards their image sensors over the course of three years. Also, stock based transactions isn't the only method Sony has when it comes to acquisitions, its just an example of what they could leverage for an acquisition, as AMD & Take Two have demonstrated. 



VideoGameAccountant said:

I've said this in another thread, so I'll summarize it here. Sony can't buy Square. They don't have the liquidity to do it
Square's market cap (according to Google) is 689 billion yen. In just cash, Sony has 1.473 trillion yen. However, this is split between all of Sony's departments. If you take out Sony Financial Services, they only have 874 billion yen. This means Sony would either have to go into debt or spend all their cash to buy Square. Even if they do a half cash, half stock deal, then it's still costing them 345 billion yen, and would only leave all of Sony's divisions (sans Financial Services) with 529 billion yen. One thing to keep in mind is Sony does not have a lot of liquidity, so to lose this much cash puts them at a pretty big risk. Also, Sony has a lot of short term debt (1.478 trillion which is more than the cash they have on hand) and a decent amount of long term debt. They don't have the money to throw around.

Moreover, if Sony did this, you'd see Nintendo and probably Microsoft throw their hat into the ring to prevent this from happening. Nintendo has 1.07 trillion yen and has far more liquid assets (securities and CDs) than Sony does, so they could throw more money around than Sony could, if a buy out was possibility. Not to mention they have less debt. They also have a lot to lose if Sony bought Square, since Nintendo pushes for Dragon Quest, has smaller developers that make third party content for them (Octopath/Braverly Default) and legacy content (and Smash I guess). So even if Sony could do it, they'd likely get outbid in the end.

By the by, there is a reason why you haven't seen Sony make a lot of big acquisitions, or many acquisitions to begin with.

Source: https://www.sony.com/en/SonyInfo/IR/library/presen/er/pdf/21q2_sony.pdf

How would you explain Sony putting aside 18.3B+ to invest for their midrange plan if they don't have money to throw around?



PotentHerbs said:
VideoGameAccountant said:

I've said this in another thread, so I'll summarize it here. Sony can't buy Square. They don't have the liquidity to do it
Square's market cap (according to Google) is 689 billion yen. In just cash, Sony has 1.473 trillion yen. However, this is split between all of Sony's departments. If you take out Sony Financial Services, they only have 874 billion yen. This means Sony would either have to go into debt or spend all their cash to buy Square. Even if they do a half cash, half stock deal, then it's still costing them 345 billion yen, and would only leave all of Sony's divisions (sans Financial Services) with 529 billion yen. One thing to keep in mind is Sony does not have a lot of liquidity, so to lose this much cash puts them at a pretty big risk. Also, Sony has a lot of short term debt (1.478 trillion which is more than the cash they have on hand) and a decent amount of long term debt. They don't have the money to throw around.

Moreover, if Sony did this, you'd see Nintendo and probably Microsoft throw their hat into the ring to prevent this from happening. Nintendo has 1.07 trillion yen and has far more liquid assets (securities and CDs) than Sony does, so they could throw more money around than Sony could, if a buy out was possibility. Not to mention they have less debt. They also have a lot to lose if Sony bought Square, since Nintendo pushes for Dragon Quest, has smaller developers that make third party content for them (Octopath/Braverly Default) and legacy content (and Smash I guess). So even if Sony could do it, they'd likely get outbid in the end.

By the by, there is a reason why you haven't seen Sony make a lot of big acquisitions, or many acquisitions to begin with.

Source: https://www.sony.com/en/SonyInfo/IR/library/presen/er/pdf/21q2_sony.pdf

How would you explain Sony putting aside 18.3B+ to invest for their midrange plan if they don't have money to throw around?

They'll have to go into debt because unless they plan to sell assets, they don't have the cash to do that. 



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VideoGameAccountant said:

I've said this in another thread, so I'll summarize it here. Sony can't buy Square. They don't have the liquidity to do it
Square's market cap (according to Google) is 689 billion yen. In just cash, Sony has 1.473 trillion yen. However, this is split between all of Sony's departments. If you take out Sony Financial Services, they only have 874 billion yen. This means Sony would either have to go into debt or spend all their cash to buy Square. Even if they do a half cash, half stock deal, then it's still costing them 345 billion yen, and would only leave all of Sony's divisions (sans Financial Services) with 529 billion yen. One thing to keep in mind is Sony does not have a lot of liquidity, so to lose this much cash puts them at a pretty big risk. Also, Sony has a lot of short term debt (1.478 trillion which is more than the cash they have on hand) and a decent amount of long term debt. They don't have the money to throw around.

Moreover, if Sony did this, you'd see Nintendo and probably Microsoft throw their hat into the ring to prevent this from happening. Nintendo has 1.07 trillion yen and has far more liquid assets (securities and CDs) than Sony does, so they could throw more money around than Sony could, if a buy out was possibility. Not to mention they have less debt. They also have a lot to lose if Sony bought Square, since Nintendo pushes for Dragon Quest, has smaller developers that make third party content for them (Octopath/Braverly Default) and legacy content (and Smash I guess). So even if Sony could do it, they'd likely get outbid in the end.

By the by, there is a reason why you haven't seen Sony make a lot of big acquisitions, or many acquisitions to begin with.

Source: https://www.sony.com/en/SonyInfo/IR/library/presen/er/pdf/21q2_sony.pdf

There are a few things money is at historically low levels,Sony's CFO stated in a financial statement after the Zenimax takeover that they had the means to make large scale acquisitions beyond the cash they had already set aside toward any future purchases,  11 billion US in cash and another 16 billion in liquid assets  giving them 27 billion liquidity without needing to touch their lines of credit, he also mentioned that their liquidity was growing at record levels (I read somewhere iirc around 400%) and he also stated the reason he made the statement was to clear the air regarding speculation that Sony didn't have the means to make these size acquisitions and if they did it would come with excessive debt levels or impact their cash flow, he again further emphasised that he was about clearing  up those misconceptions and this didn't mean they were making any such acquisitions and also importantly it also didn't mean if they did they would be done  just by using up their cash/ liquidity reserves in one hit.

Another aside when it comes to their capacity to obtain credit and it may not have anything to do with this is I recall sony making news for buying out and reincorporated their banking service.

Last edited by mjk45 - on 19 January 2022

Research shows Video games  help make you smarter, so why am I an idiot

mjk45 said:

There are a few things money is at historically low levels,Sony's CFO stated in a financial statement after the Zenimax takeover that they had the means to make large scale acquisitions beyond the cash they had already set aside toward any future purchases,  11 billion US in cash and another 16 billion in liquid assets  giving them 27 billion liquidity without needing to touch their lines of credit, he also mentioned that their liquidity was growing at record levels (I read somewhere iirc around 400%) and he also stated the reason he made the statement was to clear the air regarding speculation that Sony didn't have the means to make these size acquisitions and if they did it would come with excessive debt levels or impact their cash flow, he again further emphasised that it was just to clear the misconception and this didn't mean they were making any such  acquisitions and if they did they would do so by using up all that liquidity in one hit it was just made to clear the air.

Another aside when it comes to their capacity to obtain credit and it may not have anything to do with this is I recall sony making news for buying out and reincorporated their banking service.

Can you link that by any chance?



id love for sony to buy konami and make more metal gear ,and silemt hillls



PotentHerbs said:
mjk45 said:

There are a few things money is at historically low levels,Sony's CFO stated in a financial statement after the Zenimax takeover that they had the means to make large scale acquisitions beyond the cash they had already set aside toward any future purchases,  11 billion US in cash and another 16 billion in liquid assets  giving them 27 billion liquidity without needing to touch their lines of credit, he also mentioned that their liquidity was growing at record levels (I read somewhere iirc around 400%) and he also stated the reason he made the statement was to clear the air regarding speculation that Sony didn't have the means to make these size acquisitions and if they did it would come with excessive debt levels or impact their cash flow, he again further emphasised that it was just to clear the misconception and this didn't mean they were making any such  acquisitions and if they did they would do so by using up all that liquidity in one hit it was just made to clear the air.

Another aside when it comes to their capacity to obtain credit and it may not have anything to do with this is I recall sony making news for buying out and reincorporated their banking service.

Can you link that by any chance?

I'll try to find it, it was in one of Sony's quarterly or yearly statements but I can't remember the exact one, I do recall the figures used rather than being part of the financial figures in the usual manner you see for for those quarterly yearly statements, they were used by the CFO in a more demonstrative manner since he was making a comment , that's what made me remember it since iirc he started by mentioning this was a comment and not part of the figures, I'm also pretty sure it was here on VGChartz where I read the statement if that helps I'm sorry that I don't have it at hand atm.

Last edited by mjk45 - on 19 January 2022

Research shows Video games  help make you smarter, so why am I an idiot

Sony need not respond in any way. They likely have unannounced deals and partnerships they've already been working on for months to a year ago that have yet to bear fruit.

They were in a position of strength before Xbox's Activision acquisition and that hasn't changed. Sony is still in an excellent position and shouldn't start chasing easter eggs just to fill their basket. A better path would be to fortify their current strategy and build upon their current successes.

Rushing to just make some quick headlines for publicity may cause an unforced error. There is no need to panic the shareholders or the customer.



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