Sony Unit To Boost Market Share With Insomniac Games Buyout
Zacks Investment Research | Aug 20, 2019 07:25AM ET
Sony Corporation’s (NYSE:SNE) wholly-owned subsidiary, Sony Interactive Entertainment (SIE), said that it inked agreements to acquire Burbank, CA and Durham, NC-based privately held Insomniac Games, Inc. in its entirety. Headquartered in San Mateo, CA, SIE has global functions in California, London and Tokyo.
Insomniac Games, a leading game developer and long-time partner of SIE (spanning more than 20 years), is the developer of PlayStation 4’s top-selling Marvel’s Spider-Man and the extremely popular PlayStation Ratchet & Clank franchise.
Financial terms of this transaction, including the cost of acquisition, were not disclosed on account of contractual commitments. The deal is subject to regulatory approvals and certain closing conditions.
It will help the console maker augment its game offerings ahead of the launch of game streaming services from rival companies, including Alphabet Inc.’s (NASDAQ:GOOGL) Google, as it prepares to launch PlayStation 5 next year.
Upon completion, Insomniac Games will join the global development operation of Sony Interactive Entertainment Worldwide Studios (“SIE WWS”). This would be the 14th studio to join the SIE WWS family while enhancing its creative force.
The latest move strengthens SIE’s commitment to creative excellence and innovation in game development. The integration of Insomniac Games to SIE WWS reiterates its commitment to advance world-class gaming experiences that can only be found on the PlayStation platform.
Further, in an effort to fortify its share in the $150-billion global video gaming market, the Japanese firm in March collaborated with principal rival Microsoft Corporation (NASDAQ:MSFT) — the maker of Xbox game console — to stream games and content to consumers, and offer game makers new development tools.
Post closing, the daily operations of Insomniac Games are likely to be run by the present management team in conjunction with SIE WWS San Mateo Studio. Sony has long-term earnings growth expectation of 7.7%. The stock has rallied 15.5% compared with the Zacks Investment Research
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