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Microsoft Deal Wipes $20 Billion Off Sony's Market Value in a Day

  • Xbox maker announced plan to buy Activision for $69 billion
  • Sony lacks Microsoft’s financial muscle for an IP bidding war
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Microsoft Buys Activision: Explain This
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Sony Group Corp. shares fell 13% in Tokyo on Wednesday, their biggest drop since October 2008, after PlayStation rival Microsoft Corp. announced a $69 billion deal to acquire games publisher Activision Blizzard Inc.

The blockbuster acquisition escalates Microsoft’s spending spree to secure intellectual property assets for its Xbox Game Pass service, wiping $20 billion off Sony’s valuation in a day. The push to attract paying subscribers with an overwhelming portfolio of games challenges Sony’s traditional console business model that relies on high-profile exclusive titles and hardware sales. Games and network services account for about 30% of Sony revenue.