Analyst Thinks Sony ‘Vastly Overpaid’ for Bungie in Desperation

Wedbush Securities analyst Michael Pachter thinks Sony “vastly overpaid” for Bungie in an attempt to prevent Microsoft from getting ahead in the competition. Speaking to Yahoo Finance, Pachter used Electronic Arts’ acquisition of Respawn Entertainment to illustrate his point, stating that EA paid $700 million for a studio that generates $700 million per annum in revenue. In contrast, Sony paid $3.6 billion for a developer with an annual earning of about $200 million.

Was PlayStation Bungie deal overpriced?

Rumor has it that Microsoft made several attempts to reacquire Bungie over the years but felt that the company’s asking price was too high. Bungie has denied these reports but they crop up every now and then, backed by known insiders. While we’ll probably never know what the companies talked about behind the scenes, Sony has been very clear about why it acquired Bungie.

Sony wants to use Bungie’s 30 years of experience and technical expertise to build a live service portfolio of its own. Destiny and Bungie’s future IP are only a small part of the reason Sony found value in pursuing the acquisition. Nevertheless, Pachter thinks the deal doesn’t make sense. “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,” Pachter continued. “It’s not really a deal that makes a whole lot of sense to me. The others do.”

Opinion: Bungie’s revenue is the least of Sony’s concerns

Zarmena writes… Pachter is focusing solely on Bungie’s revenue, but as previously mentioned, that’s just one small piece of the puzzle here. Sony has been lacking in the multiplayer and live service department and by acquiring Bungie, the company will be able to build its own portfolio as opposed to relying on third-party titles. It’s too early to say if Sony “vastly overpaid,” and Pachter is no stranger to being completely wrong.

In other news, Rocksteady’s Suicide Squad has reportedly been delayed and Ghostwire Tokyo will launch in March.

[Source: Yahoo Finance via Push Square]

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