The biggest news last week was of course the fact that Sony is buying Bungie, an ex-Microsoft studio and the creator of Halo, even though they nowadays are most famous for the Destiny series.
Even if it costed approximately 1/20 of what Microsoft paid for Activision Blizzard, it's still one of the ten biggest video game acquisitions of all time, as Sony paid $3.6 billion to get Bungie. But according to a Yahoo Finance interview with the world's most famous video game analyst, Michael Pachter from Wedbush Securities, this was a huge mistake as it was a "vastly" more than it should have been and he calls the deal "crazy talk".
He explains why and gives some solid examples of other companies being purchased recently, lower than their recent stock's highs:
"The Activision deal and the Zynga deal were both done below those stock's recent highs. So Activision had traded over 100, and the deal was at 95. Back in October, it was over 100. Zynga had traded over 11, I believe, and the deal was done at 986. So you know, they didn't really overpay, either of the acquirers. Bungie went for $4 million per developer. And most deals are between $250,000 and a million. I've seen deals as close, you know, as high as $2 million per developer. This is crazy talk."
There have been rumours from fairly decent sources claiming that Microsoft tried to buy Bungie for $2 billion, which fell through. Pachter thinks the whole deal being signed for this sum might be a way for Sony to come up with an answer to Activision Blizzard being bought:
"And just to compare and contrast, EA bought Respawn about three or four years ago for $700 million with 400 developers. And those guys generate $700 million a year in revenue. Bungie does about $200 million in revenue. So I think Sony vastly overpaid. I think this was a statement that we're not going to let Microsoft get ahead of us, so we'll just buy something out of desperation. It's not really a deal that makes a whole lot of sense to me. The others do."
What do you think? Was it a steal on Sony's behalf, a very reasonable sum or could the money have been spent better?
Thanks GamingBolt