Nearly every company floated commonly can have some justification and the documents tell us that Microsoft took a conceptual look at all of them and more.
However, the questions are:
- Who is likely to sell at a price Microsoft wants to pay?
- Which needs does Microsoft still have, if any?
I think Square is sluggishly performing, Sega is doing decently, and Capcom is doing very well. From this perspective you might imagine Square could be had at a “discount” of sorts. Embracer and Ubisoft are both in the toilet for their stock price, so if there was ever a time they were open to dealmaking, it would be now.
But the other side of the coin - Microsoft’s needs - makes me think that their publisher spree is probably over for now. That doesn’t mean 0 acquisitions, but I’m skeptical of further big plays.
The three main objectives laid out in their internal strategy documents for M&A were all thoroughly satisfied by ABK. While Spencer has publicly said “it would be nice to get more in Japan / Asia”, owning morre studios in Japan was not an internal strategic priority. Growth on PC in those (and other) markets was, but Blizzard is definitely a big opportunity there.
The other thing is that Microsoft is not, imo, in a position where they are keen for further large expansion this year or next. ABK was a huge number of new staff to take on and in the middle of passing that acquisition, MSFT underwent several rounds of layoffs. The hiring freeze that went along with that has now relaxed a little bit, but I do think they’re going to be more disciplined in what they purchase for the forseeable future. Companies that may seem like slam dunks to buy like Certian Affinity or Asobo due to long term partnerships could easily be met with a response of - why are we trying to insource our outsourced labour? We already get value from them, why do we want them on our payroll directly when it’s more flexible as it currently stands? While people may groan at the prospect of Tencent or the Saudi group investing in or buying some of these companies, their business it not lost to Microsoft because they still largely operate autonomously.