Sony Pictures CEO: Games Industry Consolidation to Continue - News
by William D'Angelo , posted on 01 October 2021 / 5,363 Views
Sony Pictures Chairman and CEO Tony Vinciquerra during the Bank Of America Merrill Lynch Media, Communications & Entertainment Conference was asked if he saw the movie industry to continues its consolidation.
Vinciquerra not only sees the movie industry to continue consolidating, but also the video game industry.
"I think the traditional medium of television and film has probably peaked and the new growth area will be the games business, and who’s better positioned than Sony for that business?" said Vinciquerra.
"I do think you’ll see some consolidation on that side. You’ll probably see a little more on our side as well. I do think there are probably too many film studios and you might see one or two less over the next five-to-ten years.
"But I think the next area of consolidation will be the games business."
There has been consolidation in video games in recent years with Microsoft growing its first-party lineup just five studios a years ago to now 23 studios with the most recent acquisition of Bethesda parent company ZeniMax Media.
Other acquisitions include Electronic Arts acquiring Codemasters, as well as Tencent and Embracer acquiring a fair number of studios.
A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel dedicated to gaming Let's Plays and tutorials. You can contact the author at wdangelo@vgchartz.com or on Twitter @TrunksWD.
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I do wonder how's that going to affect the market in the future. The absortion of the A-AA game devs/publishers at the hands of the big players is going to leave a hole in the market, not to mention they are going to start competing with themselves at some point. I just hope they don't start acting like EA or Activision and bleed studios dry for their IPs and workers.
I think this is a certainty, unless something happens that makes it much more difficult for companies to borrow money. Right now, money is flowing freely, and there are tons of small/medium companies in the gaming space that look like good acquisition targets.
Yeah but they don't even have to borrow money. Nintendo has something like 8 billion in cash. I'm sure Microsoft has 10 times that amount. And Sony probably has at least as much as Nintendo although I can't say that for sure.
The only thing stopping acquisitions is the companies that refuse the deals.
According to macrotrends.com Sony cash on hand for 2021 was $44.081B, a 42.59% increase from 2020.
Cash on hand doesn't mean they can do what they want with all of it. That cash is used for rent, paying employees, property tax, utilities, equipment, budget, research, and more for that fiscal year. So the amount of cash spending is a lot less than what people think.
Not all acquisitions use debt, but most do. The cash on hand certainly impacts that decision some. But, it isn't usually like "we have 50 billion dollars, so lets spend 5 billion cash on company X". It is usually more like "we need to acquire company X, and we can borrow the money at next to nothing and maintain our strong cash position. So, let's do it."
Not only that. There are cases as reported being MS in one of those, that they calculated that they could get more profits from picking that money sitting around and buy a dev than use it for other stuff or leave it be.
Right. When you can borrow money for next to nothing, and you have uses for your cash that can generate a greater return than what you'll pay to borrow the money, it makes sense to borrow it.
Not his place of talk, but yes it is likely that it will keep going.
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