(Bloomberg) — Global gaming stocks are rallying after Microsoft Corp.’s landmark $69 billion takeover deal for Activision Blizzard Inc., a move that could help enliven the technology sector after a cranky start to 2022.
U.S. rivals Electronic Arts Inc., Roblox Corp., France’s Ubisoft Entertainment SA and Poland’s CD Projekt SA surged — some of them are being talked-up as potential acquisition targets. The recent selloff in their shares and rising interest in gaming and the metaverse from megacaps such as Meta Platforms Inc. has raised expectations for more deals in the space.
“If Microsoft can get them over the line without any antitrust issues, the rest are all in play,” said Neil Campling, a tech analyst at Mirabaud Securities. “Electronic Arts would then be the most obvious takeout target.” Ubisoft is seen as the other potential target, but could be hurt by the family holding structure, according to Campling.
The Microsoft-Activision deal also follows Take-Two Interactive Software Inc.’s offer for mobile game maker Zynga Inc. last week. “Both recent big deals show that market leaders are undervalued,” said Piotr Poniatowski, analyst at MBank in an email. “Microsoft deal shows also that subscription model is the future of gaming, which should support companies with large catalog of games.”
Microsoft shares traded 1% down Tuesday in New York. “Acquiring Activision will help jump start Microsoft’s broader gaming endeavors and ultimately its move into the metaverse with gaming the first monetization piece of the metaverse in our opinion,” said Dan Ives, analyst at Wedbush securities.
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