Summary
Sonycurrently appears to be looking for new studio acquisition opportunities, as suggested by some newly emerged evidence. The Japanese gaming giant has been on an acquisition spree since mid-2021, withBallistic Moon reportedly being one of Sony’s latest purchases.
Following recent developments, Sony’s fierce rival Microsoft appears to be on the verge of completing its $68.7 billion acquisition of Activision Blizzard, by far the largest such deal in the history of the gaming industry. The PlayStation maker hence cannot rest on its laurels, even though the current console generation saw it once again build a significant sales lead on its competitor, to the point thatMicrosoft is openly admitting that Xbox lost the console wars.
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Nevertheless,Sonyappears to be in the market for more studios, as suggested by a recently emerged job ad intended to help bolster the company’s M&A team. The July 25 listing, first spotted by Reddit user Zhukov-74, details a managerial role based out of Sony Interactive Entertainment’s headquarters in San Mateo, California. The posting states that Sony is looking for an experienced economist or business administrator that would help it identify “inorganic growth opportunities” by the way of acquisitions, joint ventures, investments, or a combination thereof.
On its own, the newly surfaced job listing is hardly enough evidence to conclude that Sony’s ongoing acquisition spree won’t be slowing down anytime soon. That notwithstanding, the ad dovetails with one recent report stating thatSony is planning more PlayStation acquisitions in the near future. The Japanese conglomerate is supposedly so adamant to continue its aggressive acquisition strategy that it’s even considering the idea of spinning off its financial services division as a publicly traded company, The Financial Times reported in May, citing sources familiar with the matter.
Turning to the stock market with a partial spin-off would allow Sony to raise additional funds for its acquisition war chest without getting saddled in even more debt. The company’s total debt amounted to approximately $30.5 billion as of March 31, with its debt-to-equity ratio thus currently standing at 3.4, which is considered average to unfavorable, depending on the analyst. The figure is still a 7% improvement compared to the previous year, when Sony’s D/E ratio reached 3.6.
Given the sheer gap in size between the two companies,Sony’s approach to acquisitions was always vastly different to Microsoft’s; while the latter has often broken the bank on high-profile moves such as its 2021 acquisition of Bethesda owner ZeniMax Media, valued at $7.5 billion, Sony has lately demonstrated a tendency to pick up smaller studios, but do so fairly frequently. Assuming it’s indeed looking to continue that strategy moving forward, funding it with additional loans would likely be a risky move given its existing debt-to-equity ratio, which might be why it’s currently said to be considering a partial spin-off of its financial services business.
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