Will there be a trend of big name companies merging with each other in the near future? Considering some top titles cost around the range of 30 million USD or more to make, Take-Two Interactive CEO Ben Feder told a business conference that consolidation in the videogame industry is inevitable as growth continues.
"I do believe that consolidation ultimately is inevitable," Feder told Reuters.
"Video-game development is not getting any cheaper. It’s a capital-intensive business, and I don’t see that going away. That will drive some of the smaller competitors out."
Because of the recent merger of Blizzard and Activision that no one really expected, Take-Two’s shares rose 8.7 cent to 16.28 USD amidst investor speculation that other publishers could see consolidation. Take-Two’s chairman Strauss Zelnick assured the public that the copmany will not be sold, instead it’s growth within the next five to seven years is its main focus.
Are mergers good for the gaming industry? In terms of financial concerns, it seems that large mergers such as the one between Blizzard and Activision can only improve the quality production of future games.
With a larger "working body" and a strong relationship between developers and publishers, high production value can be achieved without having to worry about financial and time constraints.
A downside to this however could be that smaller independent developers and publishers might be left in the dust. With big name companies like Blizzard and EA, smaller companies might get completely overlooked.
What do you think? Are mergers a good idea? Can smaller companies benefit from these mergers in the long run?
[via gamesindustry.biz]
