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

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.



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aTokenYeti said:

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.



aTokenYeti said:

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 of 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.

The first point is the only real risk Sony has in this acquisition. Everything else you posted is ridiculous and quite frankly doom posting. The deals Sony are currently negotiating, and the ones that are nearly complete, won't break down because of the Bungie deal. Not every studio or publisher have the same kind of leverage as Bungie does. Sony also values Bungie more than other studios because of what they bring to the table. 

Its funny you think Sony overpaid because they were in a position of weakness, rather than the fact Sony paid a premium for Destiny 2, one of the most popular live service games today, with over 180+ Million players and consistently charting in most played weekly for Steam, PSN, XBL, five years after it's release. IIRC, the launch of Destiny was the last time Call of Duty was outsold in the NPD. Sony will recoup the money from this acquisition without having to do much. If Bungie's new IP is the next big multiplayer game, which going by their track record has a good chance of happening, Sony got Bungie at a bargain, and it will ultimately stem the impact of COD leaving the PlayStation platform. 

The deal doesn't make sense because we aren't privy to all the details. For instance, 1.2B of the 3.6B is going to be used for talent retention when the acquisition closes, and none of us would have known if Sony didn't mention it. For all we know, multiplatform could mean PS5, PC & mobile, we don't have enough context about it until it actually happens, let alone make a baseless post about it.

Last edited by PotentHerbs - on 04 February 2022

I’ve always been an Xbox fan and Halo CE is still one on my favorite games of all time. With MS currently buying the whole games market I’m pretty thrilled Sony made this purchase.

I appreciate all the common sense everyone is sharing in this thread. Personally, I’m going on intuition here. I don’t like MS buying their way to the top. Sony got some poetic justice by acquiring the talent that made Xbox what it is.

I’d definitely buy a PlayStation 5 to check out Destiny now.



PotentHerbs said:
aTokenYeti said:

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 of 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.

The first point is the only real risk Sony has in this acquisition. Everything else you posted is ridiculous and quite frankly doom posting. The deals Sony are currently negotiating, and the ones that are nearly complete, won't break down because of the Bungie deal. Not every studio or publisher have the same kind of leverage as Bungie does. Sony also values Bungie more than other studios because of what they bring to the table. 

Its funny you think Sony overpaid because they were in a position of weakness, rather than the fact Sony paid a premium for Destiny 2, one of the most popular live service games today, with over 180+ Million players and consistently charting in most played weekly for Steam, PSN, XBL, five years after it's release. IIRC, the launch of Destiny was the last time Call of Duty was outsold in the NPD. Sony will recoup the money from this acquisition without having to do much. If Bungie's new IP is the next big multiplayer game, which going by their track record has a good chance of happening, Sony got Bungie at a bargain, and it will ultimately stem the impact of COD leaving the PlayStation platform. 

The deal doesn't make sense because we aren't privy to all the details. For instance, 1.2B of the 3.6B is going to be used for talent retention when the acquisition closes, and none of us would have known if Sony didn't mention it. For all we know, multiplatform could mean PS5, PC & mobile, we don't have enough context about it until it actually happens, let alone make a baseless post about it.

They paid $3.6 billion for a studio with a single IP that brings in an absolute maximum of $200 million per year in revenue. There are studios with half the employee headcount that bring in double that yearly. That tells you all you need to know about the confidence Sony has in the live service games they currently have in development. 

As to my second point, it’s not going to “tank” Sony’s future negotiations, but it is going to raise bidding prices and make Sony have to agree to things they otherwise wouldn’t. If Sony is attempting to acquire a Square Enix, for example, it stands to reason that square would see the terms of the deal Bungie got and would ask for either a higher price out Sony, more production autonomy written into contract, or both. That is not a position Sony wants to be in. 

Compare this deal on the balance to the $200 million they paid to purchase Insomniac. That deal has probably already paid for itself 5-10 fold. 

Last edited by aTokenYeti - on 04 February 2022

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aTokenYeti said:

They paid $3.6 billion for a studio with a single IP that brings in an absolute maximum of $200 million per year in revenue. There are studios with half the employee headcount that bring in double that yearly. That tells you all you need to know about the confidence Sony has in the live service games they currently have in development. 

As to my second point, it’s not going to “tank” Sony’s future negotiations, but it is going to raise bidding prices and make Sony have to agree to things they otherwise wouldn’t. If Sony is attempting to acquire a Square Enix, for example, it stands to reason that square would see the terms of the deal Bungie got and would ask for either a higher price out Sony, more production autonomy written into contract, or both. That is not a position Sony wants to be in. 

Compare this deal on the balance to the $200 million they paid to purchase Insomniac. That deal has probably already paid for itself 5-10 fold. 

As Potent already pointed out to you: the acquisition is only 2.4B. The other 1.2B is part of an employee incentive package to avoid losing talent when Bungie are on the verge of unveiling and releasing their new live-service IP, 'Matter'. This 1.2B is also not a lump-sum: but rather will be paid out to employees over a few years.

This tells us that Sony is in fact very confident in what Bungie is working on that they aren't willing to lose staff and therefore jeopardize development of the game. 

Sony is getting Destiny 2, Bungie's next live-service title 'Matter', 1 or 2 other games in development, cross-media push with Destiny (and eventually their next title), and extensive live-service knowledge which will affect the 10 live-service titles Sony have confirmed to have in development. 

Insomniac of course was a fantastic purchase based on their value. However, Insomniac didn't bring with them any notable IP nor were they going to contribute to a gap in Sony's portfolio. Apples to oranges. 



EricHiggin said:
the-pi-guy said:

> 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.

You misunderstood MS, I`m sure, Phil was just telling the truth, exclusivity to Sony is what is evil and bad. When something is available on Gamepass then even if exclusive it is godsent because you can play for free without evil Sony getting a dime.



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."

twintail said:
aTokenYeti said:

They paid $3.6 billion for a studio with a single IP that brings in an absolute maximum of $200 million per year in revenue. There are studios with half the employee headcount that bring in double that yearly. That tells you all you need to know about the confidence Sony has in the live service games they currently have in development. 

As to my second point, it’s not going to “tank” Sony’s future negotiations, but it is going to raise bidding prices and make Sony have to agree to things they otherwise wouldn’t. If Sony is attempting to acquire a Square Enix, for example, it stands to reason that square would see the terms of the deal Bungie got and would ask for either a higher price out Sony, more production autonomy written into contract, or both. That is not a position Sony wants to be in. 

Compare this deal on the balance to the $200 million they paid to purchase Insomniac. That deal has probably already paid for itself 5-10 fold. 

As Potent already pointed out to you: the acquisition is only 2.4B. The other 1.2B is part of an employee incentive package to avoid losing talent when Bungie are on the verge of unveiling and releasing their new live-service IP, 'Matter'. This 1.2B is also not a lump-sum: but rather will be paid out to employees over a few years.

This tells us that Sony is in fact very confident in what Bungie is working on that they aren't willing to lose staff and therefore jeopardize development of the game. 

Sony is getting Destiny 2, Bungie's next live-service title 'Matter', 1 or 2 other games in development, cross-media push with Destiny (and eventually their next title), and extensive live-service knowledge which will affect the 10 live-service titles Sony have confirmed to have in development. 

Insomniac of course was a fantastic purchase based on their value. However, Insomniac didn't bring with them any notable IP nor were they going to contribute to a gap in Sony's portfolio. Apples to oranges. 

Anything put in comparison to Insomniac is ridiculous on value. This is more like Minecraft deal, at the moment it seemed obtuse for MS to pay 2.5B for an Indie studio with a single game, but well it seems like it paid back. We will discover in the next 10 years if this was a good buy (right now it doesn`t seem like it, but as also pointed out maybe if inflation wasn`t so rampant and consolidation so strong this deal wouldn`t be made or would be cheaper).

Also besides the 1.2B for retention it is quite possible that some of the other 2.4B have a good portion dedicated to increase team count, headcount, new locations, tools, etc. We may never know the truth, but maybe in the end the leadership won`t pocket as much money as we first though.

And it is quite possible that there is very strong terms in the contract to prevent Bungie trying any shenanigans like pocketing the money and in 5 years running with it.



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."

What i dont get is where is the actual proof bungie stays multiplatform outside sony?
You know the same proof that activision will keep COD xbox exclusive i mean thats how people frame Phil. Heh



 "I think people should define the word crap" - Kirby007

Join the Prediction League http://www.vgchartz.com/predictions

Instead of seeking to convince others, we can be open to changing our own minds, and seek out information that contradicts our own steadfast point of view. Maybe it’ll turn out that those who disagree with you actually have a solid grasp of the facts. There’s a slight possibility that, after all, you’re the one who’s wrong.

snyps said:

I’ve always been an Xbox fan and Halo CE is still one on my favorite games of all time. With MS currently buying the whole games market I’m pretty thrilled Sony made this purchase.

I appreciate all the common sense everyone is sharing in this thread. Personally, I’m going on intuition here. I don’t like MS buying their way to the top. Sony got some poetic justice by acquiring the talent that made Xbox what it is.

I’d definitely buy a PlayStation 5 to check out Destiny now.

I don't like the consolidation either but if you listen to MS it almost sounds like MS is saying if this doesn't happen Netflix, Amazon, or Apple will do it and no one will want that. I could be wrong though.