Microsoft, Sony, and others have no reason to slow down their acquisition sprees

Acquisition season is still upon us, and it’s not going to let up anytime soon. In January alone, Take-Two bought Zynga for $12.7 billion, Activision Blizzard is selling to Microsoft for $69 billion, and Sony capped off the month with its $3.6 billion Bungie deal. It’s natural to expect the acquisition market to cool off after such a hot start to the year, but conditions will likely keep many companies on the hunt.

One of the biggest factors fueling the acquisition arms race is that many of the big players are succeeding in their current strategies. Sony’s PlayStation and Microsoft’s Xbox are both more profitable than ever. They have made desirable consoles that stores cannot keep in stock, and their games continue to set a new bar in terms of quality. With such strong fundamentals, the companies can afford to fund inorganic growth. This extends beyond Microsoft and Sony. The entire gaming market is still on a high from strong sales throughout the pandemic, and they are looking at ways to maintain that momentum for long-term success.