Sony Group Corp. shares plunged 13% after PlayStation rival Microsoft Corp. posted a $69B acquisition deal, according to a report by Bloomberg on Wednesday.

  • The blockbuster acquisition boosts Microsoft’s spending spree to obtain intellectual property assets for its Xbox Game Pass service, eroding $20B off Sony’s valuation in a day.
  • The move to attract paying subscribers with a significant portfolio of games challenges Sony’s traditional business model that depends on high-profile exclusive titles. Games and network services account for nearly 30% of Sony revenue.
  • Microsoft reported on Tuesday that it surpassed 25 million Game Pass subscribers and will provide many Activision Blizzard games. 
  • Call of Duty, Diablo, and World of Warcraft are severely highly successful franchises developed under the Activision Blizzard brand.

Sony has retained a consistent lead in sales and exclusive games over Microsoft’s competing products across several PlayStation and Xbox generations. Sony Group Corp. down -12.79%, MSFT up +0.20%, Pre-market trading.