Sony’s valuation drops $20 billion in wake of Activision Blizzard acquisition

It didn’t take long for the impact of Microsoft’s surprise acquisition of Activision Blizzard to be felt around the gaming world. When the news broke, it sent journalists into a whirlwind to try to react, but we didn’t find out how the purchase would affect the markets until this morning.

Sony Group Corporation, which has long been Microsoft’s main competition in the gaming sphere, felt the impact almost immediately. When markets opened in Tokyo on Wednesday morning, shares of the electronic giant fell by more than 13%. This meant that the news effectively wiped more than $20 billion off Sony’s value in a matter of hours.

This isn’t necessarily surprising, given how big the purchase is and the industry’s reaction to the news. The move opens the door to a range of new exclusives for Microsoft consoles and growth of their popular Game Pass service. On the other hand, no one expects Sony to be able to match Microsoft’s spending power when it comes to purchasing companies and developers, so it is uncertain how they are likely to respond to this announcement.

It isn’t all bad news for game developers, though. Both Capcom and Square Enix rose more than three percent in the Tokyo markets as the purchase potentially improved the value of game companies with strong IP portfolios.