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

PotentHerbs on 22 January 2022
Dallinor said:

Yeah, that doesn't really explain how or why they would drop out of the hardware space. I don't follow your logic. 

I mean put it this way, even in the unlikely scenario they lost say 60% of their marketshare (which would be absolutely huge), you think they're going to stop making Playstations?

Sony have likely known about consolidation efforts across the industry since the start of this generation - I've been wondering why they've been massively pushing into multiplayer with new and existing IP. This is the answer. If they can no longer rely on 3rd parties to fill the multiplayer space, they have to do it themselves. 

It might not be worth it to Sony, from a business standpoint, to continue with hardware if they lose a ton of customers due to consolidation. Worst case scenario, they have another PS Vita moment with the PS6, would they to try and dig it out the hole? I think its more likely they double down on their service and become the "premium" subscription similar to HBO. 



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800_LilTwin on 31 January 2022
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

Ah yes Sony has no money to throw around right? just about 3.6 billion and 5 other studio purchase within less than a year



Dulfite on 31 January 2022
800_LilTwin 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

Ah yes Sony has no money to throw around right? just about 3.6 billion and 5 other studio purchase within less than a year

It's a purchase but hardly a big one.