Microsoft Activision Deal Causes Sony Stock To Fall 13

Microsoft’s announcement that it would be purchasing Activision caused a shock across the gaming industry yesterday. Evidently, the financial markets had a similar reaction to gamers as Sony’s stock fell by 13%. That’s the biggest stock fall for Sony since the financial crisis of 2008.

The 13% drop in Sony’s stock price represents a $20 billion drop in value for the company. Meanwhile, Activision stock rocketed up by 35%. Even Electronic Arts’ stock skyrocketed on opening yesterday. That’s presumably investors hoping for a similar buy-out for EA. Perhaps from Sony as a reaction to Microsoft’s purchase of Activision.

Microsoft’s purchase of Activision has everyone asking how Sony will respond to the monumental purchase. Sony losing key multi-platform franchises like Call of Duty would be devastating for PlayStation in several key markets. Although Xbox boss Phil Spencer has said that Activision games will still be “enjoyed on a variety of platforms” the question is whether mega-franchises like Call of Duty would be included in that statement. It’s hard to believe Microsoft would spend almost $70 billion on Activision only to continue making arguably the biggest franchise in the world multi-platform.

Investors and gamers alike will be watching Sony with a close eye. Microsoft just turned the new console generation on its head with this purchase. When combined with previous purchases like Bethesda, Microsoft’s stable of exclusives is now incredibly strong. A lack of exclusives was one of the criticisms of Xbox before this generation started. With the wealth of franchises now, or soon to be, under the Xbox umbrella, that’s certainly not a valid criticism anymore.

The question now is whether Sony’s own franchises are enough to compete against such a powerhouse of studios and franchises. If you ask investors and gamers, it seems almost certain that Sony will need to acquire a major studio or publisher. Whether that’s the road the company decides to go down remains to be seen. Regardless, the new console generation just got a lot more interesting.