Microsoft rumored to be buying...... [2020-04, 2020-07, 2020-11]

[Eolirin]

I don't think MS is averse to MMOs or mobile gaming. Like at all. With Bethesda they got 2 MMOs and even a mobile studio. They also tried some mobile games too (though the flopped). There is a lot of money can be made on mobile.

I don't think they're averse, especially with regards to MMOs, but I think their focus on acquisitions is Game Pass. We don't see MS going after mobile game dev studios or heavily investing in their own mobile game divisions. Square Enix has a much higher market cap than other publishers with comparable AAA output and success in large part because of their mobile games output and because of FFXIV, which has a business model that doesn't make a ton of sense on Game Pass. So they're much more expensive for stuff MS doesn't necessarily care as much about.

I also think if Square Enix wants to sell, it'll probably be to Sony and not MS anyway. I really don't see MS ending up with them.

 

[ChuckeRearmed]

Square Enix has a much higher market cap than other publishers with comparable AAA output

Aside Sega and Capcom, what other publisher has so many IPs and the same output? Ubisoft is around 10 bn, Bamco, Koei Tecmo has ties to other industries, Konami is useless...

I also think if Square Enix wants to sell, it'll probably be to Sony and not MS anyway. I really don't see MS ending up with them

Square Enix is a public company. They will be sold to a highest bidder. I believe Sony won't be able to purchase them. Too expensive for them. The final price will be around 10bn probably. I don't think they will go after a merger (like SIE + Square Enix) too.

 

[eastmen]

I don't think they're averse, especially with regards to MMOs, but I think their focus on acquisitions is Game Pass. We don't see MS going after mobile game dev studios or heavily investing in their own mobile game divisions. Square Enix has a much higher market cap than other publishers with comparable AAA output and success in large part because of their mobile games output and because of FFXIV, which has a business model that doesn't make a ton of sense on Game Pass. So they're much more expensive for stuff MS doesn't necessarily care as much about.

I also think if Square Enix wants to sell, it'll probably be to Sony and not MS anyway. I really don't see MS ending up with them.

MMO's could be the ultimate game pass games however. People already pay a subscription to play those games

 

[zed]

Square Enix is a public company. They will be sold to a highest bidder. I believe Sony won't be able to purchase them. Too expensive for them. The final price will be around 10bn probably. I don't think they will go after a merger (like SIE + Square Enix) too.

Sony has $44 billion cash on hand, MS has $137 billion cash on hand.
Both companies can easily afford 10 billion

 

[Jay]

Revenue from a game is important, which is where type of game comes into play.
But to grow GP membership variety of games matters, which may not directly generate the same kind of revenue.

 

[ChuckeRearmed]

Sony has $44 billion cash on hand, MS has $137 billion cash on hand. Both companies can easily afford 10 billion.

I was explaining on another board but ... basically distribution of Sony's cash != distribution of MS' cash.

One is a single company with 30%+ profit margins. Another one is 4 companies (Sony is a conglomerate) each of them has their own budgets and has around 10% profit margins. Companies always keep 3 quarterly profits as the untouchable sum. So for Sony the overall cash they can spend 37 overall (but I believe it is closer to 25-30), while MS can spend probably around 90 bn (but I believe it is closer to 70 bn though). In cash. Now, being 4 companies - each of Sony companies can spend up to 7 bn (I believe 5 bn is a hard limit for SIE though). Unless Sony Pictures or Sony Music say that the acquisition benefits them and they are willing to share their acquisition budget, SIE has a hard limit.

Mergers and stock options are kinda peculiar thing, they are done strategically. So SIE won't try to merge with Square Enix for example. You cannot expect that. (though if they were to spin they Playstation Publishing into a separate sub-company that would be probably possible).

They are just in a different leagues. You never see Sony doing really huge acquisitions for exactly that reason (I meant they spend a couple of billions on acquisition over the years, while MS literally spend around 30 bn at once last year if not more and wanted to spend up to 15 bn on Discord alone). All in all, Satya said that MS is all in gaming, so you can expect them spending just as much money as they did for Nuance for example.

I find it is kinda ironic though, because Sony was in a relative position of MS when they joined the market. It was the media empire in comparison to Sega and Nintendo.

 

[Eolirin]

MMO's could be the ultimate game pass games however. People already pay a subscription to play those games

Not all MMO business models are the same though.

FFXIV makes its revenues primarily via subs and, importantly, the game basically turns itself off if you stop paying for the sub. While there's a trial version that lets you play all the way to level 60 and through all of the Heavensward expansion, unless they changed how the trial account works, you cannot convert a full account back to a trial account. Since the trial account is completely free, and the normal account requires a sub to function at all, this is really awkward for Game Pass. It either has to give away the sub, (which costs more than the Game Pass sub!) or there's no value to it being in Game Pass. They'd need to change the business model to be more Game Pass friendly.

The two big MMOs in there currently, Elder Scrolls Online and Black Desert, don't work like that. They have upfront costs and then optional subscriptions, in the ESO case, or microtransactions in the Black Desert case. These models work much better for Game Pass.

Pure sub only MMOs don't work so well, except via the perks system if they want to do a one time waving of the box cost, since you can't keep playing them without paying for a second sub, and neither do full f2p mmos, again except via the perks system for a bundle of microtransaction goodies (which is how Phantasy Star Online 2 has been doing stuff).

 

[ChuckeRearmed]

MS owning FO76, ESO and FF14 sounds kind exciting to be honest. Doubt it will happen though, but I do really curious what can cost 7 and 8 in gaming these days.

WB with IPs?

 

[see colon]

Sega has a long term plan for growing their gaming division that includes significant investment in a way that doesn't look like gearing up for an acquisition. I'm not sure they'd be restructuring around a very specific and clearly laid out 5 year+ growth strategy while also pursuing a near term buyout. I could see them selling if that plan fails though.

And Square Enix has massively successful mobile and MMO divisions. They're not in any sort of trouble in the near term. FFXIV and Dragon Quest X are producing strong revenue and also are very high margin. Their mobile heavy nature is also a bit of a hit against them in terms of an acquisition, mobile doesn't really fit into MS's strategy that much, but it's over half their revenue, and about half their profits.

Regarding Square Enix... sort of. I can't help but wonder about Sony's purchase of Nixxes. As far as I know, Nixxes' only work has been porting Square Enix titles. Tomb Raider, Deus Ex, Avengers. I understand why Sony would want them if they are going to port more Playstation titles to PC. That makes sense. What doesn't make sense is why Nixxes needed or wanted to sell. If you have a steady income porting games for an established publisher, unless there is some sort of falling out, you would think that relationship would continue. Unless Nixxes know something is going on at Square Enix and sold to avoid uncertainty.

The Nixxes purchase also sort of overlaps with the Bluepoint purchase, assuming that tweet was just an early reveal. Bluepoint seams perfectly suited for porting / remastering older titles to PC or PS5. Does Sony intend to port so much of it's back catalog so quickly that it needs 2 in house studios to do it?

 

[ChuckeRearmed]

Yeah, that purchase of Nixxes was very odd, because they was the sole basically studio that did ports of Square Enix games. But as far as I recall for Windows Store, QLOC made the port of Nier Automata. Did MS paid for that?

 

[Eolirin]

Regarding Square Enix... sort of. I can't help but wonder about Sony's purchase of Nixxes. As far as I know, Nixxes' only work has been porting Square Enix titles. Tomb Raider, Deus Ex, Avengers. I understand why Sony would want them if they are going to port more Playstation titles to PC. That makes sense. What doesn't make sense is why Nixxes needed or wanted to sell. If you have a steady income porting games for an established publisher, unless there is some sort of falling out, you would think that relationship would continue. Unless Nixxes know something is going on at Square Enix and sold to avoid uncertainty.

The Nixxes purchase also sort of overlaps with the Bluepoint purchase, assuming that tweet was just an early reveal. Bluepoint seams perfectly suited for porting / remastering older titles to PC or PS5. Does Sony intend to port so much of it's back catalog so quickly that it needs 2 in house studios to do it?

It's quite possible that Square Enix will abandon their western dev studios, which would leave Nixxes without anything to do. Right now that part of the company is losing money and Dragon Quest and FF7 Remake are the only titles doing all that well. Tomb Raider sold okay, but every single entry in that series underperformed Square Enix's expectations. Avengers did not do well. If Guardians of the Galaxy also does poorly, divesting all of the western dev studios would make a lot of sense. If FF16 does poorly, getting almost entirely out of console games probably even makes sense.

But they don't need to be making console games. They've got a very successful business without them.

And Sony may want Bluepoint working on things other than PC ports. They've got a proven ability to execute. They may be grooming them to make original IP.

 

[cheapchips]

If Guardians of the Galaxy also does poorly

I can't help think of that as a very small if.

 

[eastmen]

I can't help think of that as a very small if.

Wife and I both love the guardian movies. First thing out of her mouth was that's not chris pratt , star lord looks weird who would want to play this.
So i dunno bro

 

[Eolirin]

Wife and I both love the guardian movies. First thing out of her mouth was that's not chris pratt , star lord looks weird who would want to play this.
So i dunno bro

A small if means the thing is very likely to happen. He's of the same mind as you.

 

[cheapchips]

A small if means the thing is very likely to happen. He's of the same mind as you.

Indeed. Seems very unlikely that Mrs Eastman is going to be quite as excited by non-Chris Pratt Starlord's naked torso.

I keep trying to convince Mrs Cheapchips that a one pack is better, to no avail.

 

[BRiT]

Indeed. Seems very unlikely that Mrs Eastman is going to be quite as excited by non-Chris Pratt Starlord's naked torso.

I keep trying to convince Mrs Cheapchips that a one pack is better, to no avail.

Who wants a mere 6 pack when they can have a keg?

 

[see colon]

It's quite possible that Square Enix will abandon their western dev studios, which would leave Nixxes without anything to do. Right now that part of the company is losing money and Dragon Quest and FF7 Remake are the only titles doing all that well. Tomb Raider sold okay, but every single entry in that series underperformed Square Enix's expectations. Avengers did not do well. If Guardians of the Galaxy also does poorly, divesting all of the western dev studios would make a lot of sense. If FF16 does poorly, getting almost entirely out of console games probably even makes sense.

But they don't need to be making console games. They've got a very successful business without them.

And Sony may want Bluepoint working on things other than PC ports. They've got a proven ability to execute. They may be grooming them to make original IP.

Hmm... That would be interesting if they sold their western studios and IP off. Tomb Raider and Deus Ex could do well for any platform holder if the budgets were right.

 

[Silent_Buddha]

Not all MMO business models are the same though.

FFXIV makes its revenues primarily via subs and, importantly, the game basically turns itself off if you stop paying for the sub.

While subs is certainly a large party of it, just as big is the cosmetic microtransactions.

All Items | FINAL FANTASY XIV Online Store

They regularly release new cosmetics, mounts, level up items, items to allow you to redo your character customization (looks), etc. I know a lot of people in my guild that spend way more on cosmetics each year than they do on their sub (like 4-5x as much as their yearly sub). One lady in my guild buys a Fantasia pack (45 USD for 5 character look redos) each month because she keeps wanting a different look for her characters.

Regards,
SB

 

[zed]

I can't help think of that as a very small if.

remember that smash hit
The Avengers game (2020)
Which is a far larger IP than guardians of the galaxy

What!
you don't remember it?

Trust me there was a game, google it I'm not lying there was an avengers game

yes just released

You haven't heard of it, and don't believe me? look mate, just google it right, this is not an alternative time line, this happened in our reality

 

[cheapchips]

remember that smash hit
The Avengers game (2020)
Which is a far larger IP than guardians of the galaxy

What!
you don't remember it?

Trust me there was a game, google it I'm not lying there was an avengers game

yes just released

You haven't heard of it, and don't believe me? look mate, just google it right, this is not an alternative time line, this happened in our reality

If Square Enix released a Friend's game, they'd cast David Lengelas Ross.