Sony, Tencent, NetEase continue deal hunt to expand new formats, markets

Sony’s PlayStation has dominated the gaming console market for a long time.

But the business model for console gaming has changed. It’s not just about selling the hardware and then hoping people buy new games. It’s about continuing to milk revenue from those games via regular updates that people spend money on and selling subscription services too.

Sony’s deal flow, particularly with the acquisition of Bungie, highlights this push.

“Their goal is to have enough content to incentivize players to buy their proprietary hardware, pay a monthly fee for the subscription service operated by PlayStation (PS Plus), and purchase the occasional digital game through the PlayStation Store, for which Sony receives approximately a 30% cut,” Tom Wijman, market lead for games at data company Newzoo, told CNBC.

“Snapping up studios is the most failsafe way to ensure exclusive content for their ecosystem — especially in reaction to the acquisition spree of Microsoft, one of Sony’s main competitors in the gaming space.”

Sony is also looking to expand beyond consoles. Last week, the Japanese giant said it is setting up a dedicated unit to oversee the development of mobile games, a relatively new venture for the company, which has been so dominant in consoles for years.

The acquisition of Savage Game Studios, which is dedicated to mobile games, is another key part of the strategy.

“Sony is stepping out of their comfort zone to stay competitive,” Wijman said.

Revenue from mobile gaming accounts for more than 50% of the total gaming market, whereas consoles make up about 27% of sales, according to Newzoo. So, Sony is going after an even bigger piece of the pie.

Sony’s acquisitions will help it bolster its intellectual property and library of games as it looks to expand into mobile gaming.