(Bloomberg) Shares of Sony Group Corp. plunged 13% on Wednesday, wiping out $20 billion of value following the $69 billion Microsoft deal for Activision Blizzard Inc.
The 13% fall in Sony stock is the worst since October 2008 and highlighted investor concerns over potential Microsoft’s control of the gaming consoles market.
Microsoft’s spreading spree in the Activision deal is seen to entice paying subscribers on a portfolio of games, which threatens Sony’s console business model that depends on hardware sales and high-profile exclusive titles.
With games and network services generating about 30% of Sony revenue, Amir Anvarzadeh of Asymmetric Advisors warns that the company faces a monumental challenge following Microsoft’s deal.
Morningstar analyst Kazunori Ito says Sony will struggle to catch up with Microsoft’s spending, with the decline in shares highlighting investor worries of potential industry shift from the company’s hardware-based model.
Sony is now expected to play catch up with Microsoft, although it maintains an edge in sales and exclusive games in several PlayStation and Xbox generations offerings.
6758: TYO is down -12.79%.
