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Top publisher mergers downplayed by Take-Two and SuperData

In the wake of THQ Nordic’s purchase of Koch Media last week a number of rumours have started to circulate around Microsoft acquiring some new first-party exclusives by purchasing major publishers.

Take-Two Interactive CEO, Strauss Zelnick, said that he didn’t think that any large publishers or platform holders will be purchasing one another anytime in the foreseeable future. In a recent interview with MCV Zelnick said that he didn’t see any need for consolidation in the industry.

Zelnick went on to say that companies such as EA, Activision Blizzard, and Take-Two Interactive are all significantly larger than the minimum size required to invest in expensive development on triple A titles. Furthermore, each of these companies is much larger than the minimum requirement to take on worldwide marketing teams and invest in marketing and advertising themselves. He ended by saying that each of these companies have healthy balance sheets, and that the business of gaming as a whole is one of growth, and will continue to be so for the next 25 years in his estimation. Video games, on a side note, are the fastest-growing section of the audiovisual entertainment business.

Game Publishers Logos

What Zelnick did say could drive a larger media company to acquire others is exposure to the fastest-growing entertainment business. While Vivendi have stepped away from Ubisoft for now, other businesses that may be interested include Disney, Comcast, and Time Warner, all of which have revenues that are multiples of Take-Two Interactive’s or EA’s.

Industry analyst, Joost van Druenen for SuperData said that because the games industry is such a hit driven market, ruled by the most popular releases of the time, it has always been unconcentrated, which he doesn’t see changing anytime soon.

Druenen added that the games industry is similar to the television industry, with Netflix picking up new and interesting shows, providing the funding they need to get off the ground for a season, and claiming a sizeable share of the market. Similarly the games industry is filled with publishers looking for new and interesting games, some of which may go on to be console exclusives that get the funding they need to become the next big hit. As such the industry simply doesn’t need to be consolidated, nor would it suit being so.

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