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Forums - Sony Discussion - Sony acquires Bungie for $3.6 billion - staying multiplatform



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the-pi-guy said:

Sony mentioned this to investors:
Bungie is a private company, the majority of whose shares are owned by its employees. So the payment of the consideration is structured to incentivize the shareholders and other creative talent to continue working at Bungie after the acquisition closes. Approximately one-third of the $3.6 billion consideration for acquisition consists primarily of deferred payment to employee shareholders, conditional upon their continued employment and other retention incentives.

These amounts will be paid over the course of several years after the acquisition closes, and will be recorded as expenses for accounting purposes. We expect about two-thirds of these deferred payments and other retention incentives to be expensed in the first two years after the acquisition closes.

So ~$2.4 billion for the actual buyout, $1.2 billion largely goes to employees over several years.  

And it is quite possible that a good portion of the 3.6 is or will be used to increase headcount, number of teams or other investments to reach the dev ambition.



duduspace11 "Well, since we are estimating costs, Pokemon Red/Blue did cost Nintendo about $50m to make back in 1996"

http://gamrconnect.vgchartz.com/post.php?id=8808363

Mr Puggsly: "Hehe, I said good profit. You said big profit. Frankly, not losing money is what I meant by good. Don't get hung up on semantics"

http://gamrconnect.vgchartz.com/post.php?id=9008994

Azzanation: "PS5 wouldn't sold out at launch without scalpers."

the-pi-guy said:
eva01beserk said:

They still overpaid. Specially since it sounds like bungie have zero comitment to Sony. 

Sony still gets their revenue, technology, expertise. 

May have overpaid, but the investment makes sense. 

DonFerrari said:

Same here. I would rather they put those billions in opening dozen studios.

The issue is, a lot of their studios are having trouble hiring enough people. 

True, but well they could very much open studios in South America, Africa, Oceania, Asia, etc where there is less studios and still likely good techs available even more when nutured by the seniors of other studios. That way the diversity would increase as well.



duduspace11 "Well, since we are estimating costs, Pokemon Red/Blue did cost Nintendo about $50m to make back in 1996"

http://gamrconnect.vgchartz.com/post.php?id=8808363

Mr Puggsly: "Hehe, I said good profit. You said big profit. Frankly, not losing money is what I meant by good. Don't get hung up on semantics"

http://gamrconnect.vgchartz.com/post.php?id=9008994

Azzanation: "PS5 wouldn't sold out at launch without scalpers."



Kristof81 said:

Haha, that’s good.



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the-pi-guy said:
eva01beserk said:

They still overpaid. Specially since it sounds like bungie have zero comitment to Sony. 

Sony still gets their revenue, technology, expertise. 

May have overpaid, but the investment makes sense. 

DonFerrari said:

Same here. I would rather they put those billions in opening dozen studios.

The issue is, a lot of their studios are having trouble hiring enough people. 

No it dosent. When you buy out someone they should have full comitment to the new owner. I understand not removing destiny from competition but to say that they are still fully indepedent and future games still go where ever they want? No thats a partnership and you should pay zero for that as both partys benefit from a partnership. 



It takes genuine talent to see greatness in yourself despite your absence of genuine talent.

It really shows just how shocking the other recent acquisition was that this barely got a reaction out of me despite being noteworthy still.



the-pi-guy said:
eva01beserk said:

No it dosent.  I understand not removing destiny from competition but to say that they are still fully indepedent and future games still go where ever they want? No thats a partnership and you should pay zero for that as both partys benefit from a partnership. 

> I understand not removing destiny from competition but to say that they are still fully indepedent and future games still go where ever they want?

Exclusivity is a weird bar for not being committed. Destiny is successful in large part because the game is available on so many platforms. There's a reason why Microsoft released Minecraft on PSVR/other PlayStation and Nintendo platforms long after they acquired Mojang. 

Sony is also working on trying to reach a broader audience. They just released God of War on PC.  

Paying 0, doesn't make any sense. What Bungie gets out of this deal is money, financial stability, while Sony gets Bungie's expertise, talent, revenue and profits. 

Wich is why I said I understood why they are not removing destiny from other platforms. Like Minecraft and Skyrim and every other acquisition the previous games. My point was future games. And I understand as well games near release as developement was without the new buyers money. But they said all future games. That's just insane. Or they could just be pulling a classic Phil move and backtrack later on. 

Yea and god of war and uncharted and horizon and all other games released on pc launched years first on PlayStation so they reached a broader audience while still having exclusivity.

You just descrived a partnership again not a buy out. 



It takes genuine talent to see greatness in yourself despite your absence of genuine talent.

the-pi-guy said:
eva01beserk said:

No it dosent.  I understand not removing destiny from competition but to say that they are still fully indepedent and future games still go where ever they want? No thats a partnership and you should pay zero for that as both partys benefit from a partnership. 

> I understand not removing destiny from competition but to say that they are still fully indepedent and future games still go where ever they want?

Exclusivity is a weird bar for not being committed. Destiny is successful in large part because the game is available on so many platforms. There's a reason why Microsoft released Minecraft on PSVR/other PlayStation and Nintendo platforms long after they acquired Mojang. 

Sony is also working on trying to reach a broader audience. They just released God of War on PC.  

Paying 0, doesn't make any sense. What Bungie gets out of this deal is money, financial stability, while Sony gets Bungie's expertise, talent, revenue and profits. 

SNY is likely getting the better part of the deal here. Bungie will gain as well, but not quite as much as PS.

Being able to leverage Bungies tech and know how is worth a lot, especially if that leads to new PS studios. Being able to grow Bungie beyond just Destiny will be worth a lot. Being able to profit greatly from everything Bungie will be worth a lot.

Imagine if SNY and Bungie were to target some key franchises MS now owns and wants to make exclusive. Assuming they can make something worthy, would a player rather play the game that's exclusive to XB, or the similar type game that's cross platform by Bungie/SNY?

Didn't MS just spend the last like, 4-6 years crying about how exclusives are a horrible terrible thing and cross platform cross play was the right way forward and the future? So why is MS making so much exclusive while PS will now be making cross platform?

If SNY plays it's cards right, a bunch of these acquisitions by MS won't be worth anywhere near what they are now in the future. Which is ironic, considering that's the whole point of exclusives. To hold and become more valuable to grow your userbase.

Bungie is worth a good chunk of money period, but whether the deal is worthy or not will depend on future decisions and there execution.



Bungie was able to negotiate such favorable terms, and Sony agreed to them, because Sony was negotiating from a position of weakness and both parties knew it. That’s why the deal doesn’t appear to “make sense” from the outside. Sony has no in house first person shooter talent anymore, they have 0 live service expertise, and their competitor is an industry leader in both categories. They also need to build a portfolio for Spartacus, and subscription services if that nature cannot be sustained on single player games with 5-7 year development cycles.

The deal was being negotiated for months, but Microsoft buying ABK likely caused Sony to cave to Bungie’s remaining demands to quickly get a deal done. It’s a deal that runs high risk for Sony for 3 reasons:

* Bungie has a multi decade long reputation of working poorly management, going so far as to publicly undermine management when they feel their independence is questioned
* The concessions granted to bungie weaken Sony’s hand in future negotiations with firms it’s trying to acquire. Anyone Sony was in negotiations with now or in the future will see the deal bungie got and will demand more from Sony, because they know has already caved once
* the special treatment Sony is granting Bungie risks alienating Sony’s relationship with its other first party studios, some of who have been with Sony for decades and might be wondering why they aren’t getting the special treatment Bungie is getting

If Bungie’s expertise proves critical in the success of future Sony live service titles, than this purchase will have been worth it. Otherwise, I am skeptical this deal works out in the long.