Video game industry acquisition fever: 2022 was a year full of giant purchases and some disappointments

By Flor Orsetti

The year Sony Group Corp SONY bought Bungie, Microsoft Corp MSFT got its hands on Activision Blizzard Inc ATVI and giant Embracer Group THQQF acquired more than 5 companies including IPs like “The Lord of the Rings,” is finally coming to an end.

In the first nine months of 2022, 976 purchases were announced or completed in the games sector globally, according to the latest report from investment and technology bank Drake Star.< /p>

The numbers are in the millions, but what's the big picture?

All is not well in the gaming industry.

Swedish publisher Embracer Group AB (which acquired Tripware Interactive, Eidos Montreal, Crystal Dynaics, among others this year) recently announced the closure of Onoma, a video game studio operating in Montreal, which might be known to no one but is essentially Square Enix Montreal.

This team was known for creating the "Go" series of games for mobiles, with titles like "Hitman Go". Nevertheless, the company recently announced to its staff that many employees will be transferred to a sister studio named Eidos Montreal and that another 200 employees will be laid off.

The shutdown is a shock and something unusual (even scary), especially because of the timing of it. Onoma was purchased in May; on October 10, a new name and brand were announced. A few weeks later, Embracer decided to shut it down.

Embracer, headquartered in Sweden, has focused in recent years on buying large and small companies in the gaming industry. And while the news from Onoma is discouraging, the outlook is not.

In addition to the above, one of the acquisitions highlighted is Argentinian studio Nimble Giant in 2020, which has only grown since and was able to expand to the point of opening offices in Spain and other Latin American countries.

On the other hand, Eidos Montreal, the remaining studio, is still intact but has had to deal with some budgetary adjustments. The closure of Onoma and these budget cuts are clear examples of how Embracer is looking to cut costs. Eidos Montreal reduced the scope of an unannounced project and closed another. What remains in effect is their role as co-developer, since the company is expected to work with Microsoft in the development of certain games, including one of the "Fable" franchises, led by the British company Playground Games.< /p>

News like Onoma's clearly prompts figures like Hideo Kojima to come out with clear statements on the subject: "As long as I live, I don't think I will accept these offers."< /p>

In the latest episode of "Brain Structure Podcast", the Japanese creator assured that Kojima Productions is an independent studio and will remain so.

"We have no affiliations and are not endorsed by anyone," he said. Kojima revealed that he had received offers to buy the studio, but was very candid about the fact that he founded Kojima Productions "to work on what he wants to do. As you would expect for a studio run by a creative giant like himself, some of the offers he's received are ridiculously expensive.

Kojima is very likely referring to creative freedom (when he claims he will do what he wants to do), especially after everything that happened with Konami Group Corp KNAMF, which not only canceled "Silent Hills", but also removed the classic "A Hideo Kojima Game" from the cover of "Metal Gear Solid V: The Phantom Pain".

However, it is also true that many of these acquisitions mean a loss of identity for the studios, either because they are absorbed into other companies (as in the case of Onoma and of Eidos), or because they are completely closed. Not to mention that in other cases, like with Netflix NFLX, market capitalization is the clear strategic approach and not so mu...