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Electronic Arts could be next to be bought in the gaming business frenzy

Microsoft’s nearly $69 billion acquisition of controversial game maker Activision Blizzard comes just a week after Grand Theft Auto developer Take-Two Interactive announced it was buying FarmVille owner Zynga.

Players (and investors) are now betting on which company might be the next to win. Wall Street seems to think that Electronic Arts, which makes the popular Madden NFL franchise of football video games, could be the most likely target.

Electronic Arts (EA) shares rose 4% on Tuesday (18). The company did not comment to CNN Business when asked whether it could consider a sale or make a purchase of its own.

Electronic Arts made several acquisitions last year, including a $1.4 billion purchase of Playdemic, developer of a popular mobile golf game that was owned by WarnerMedia, the parent company of CNN, which is owned by AT&T.

But unless EA makes a move, it’s getting closer and closer to being left out.

The Zynga deal will give Take-Two Interactive a greater presence in mobile games. Take-Two shares rose 2% on Tuesday.

And Activision Blizzard will now have, thanks to Microsoft, one of the deepest pockets in the world to help develop new games (and potentially absorb the costs of any legal action linked to allegations of sexual harassment and discrimination).

As more people look to play games on their phones (as well as consoles or PCs), companies like Electronic Arts as well as French game developer Ubisoft may need to do more to bolster their presence in this market.

Ubisoft shares rose 9% on Tuesday, with investors betting it is also an acquisition prospect.

Activision Blizzard already took a big step into the mobile world in 2016 with the nearly $6 billion purchase of King Digital, maker of Candy Crush.

The allure of gaming, a lucrative business for Apple thanks to the fees it charges for games purchased from the App Store and Arcade service, has not gone unnoticed by other tech giants. Meta, parent company of Facebook, Google, YouTube, Amazon and Netflix have ventured into the gaming world.

Game companies are also looking to build a presence in the so-called metaverse, virtual worlds that have become more popular with younger users.

“Gaming is the most dynamic and exciting category of entertainment across all platforms today and will play a key role in the development of metaverse platforms,” ​​said Microsoft President and CEO Satya Nadella in a statement about the agreement with Activision Blizzard. .

“We are investing deeply in world-class content, community and cloud to usher in a new era of gaming that puts gamers and creators first and makes gaming safe, inclusive and accessible to all,” he added.

It looks like Microsoft might have its eye on the Roblox gaming platform, which went public last year and has become a phenomenon of the metaverse.

Roblox now has a market cap of $46 billion, more than EA and Take-Two. Roblox shares rose 2% on Tuesday.

“Microsoft’s desire to beef up its metaverse calls into question the implications for standalones including Electronic Arts and Take-Two, or even a titleholder like Roblox and whether they are at a technical and financial disadvantage, if indeed the metaverse is the next frontier. of interactive entertainment,” Stifel analyst Drew Crum said in a report on Tuesday.

The Microsoft-Activision deal could also put more pressure on Japanese conglomerate Sony — maker of the PlayStation console and operator of PlayStation Studios, its video game development division — to step up its own game.

While Sony develops a series of exclusive PlayStation games, the company has lagged behind Microsoft in launching a true competitor to the cloud subscription service Xbox Game Pass.

Sony shares fell 7% on Tuesday. The company was not immediately available for comment when asked about its reaction to the Microsoft purchase.

But shares in Japanese rival Nintendo, which makes the popular Switch console, rose about 2%.

This content was originally created in English.

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Reference: CNN Brasil

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