Microsoft’s (NASDAQ:MSFT) latest deal to take over Activision-Blizzard (NASDAQ:ATVI) has left the video game market reeling. So much so that Microsoft’s traditional competitor, Sony (NYSE:SONY), stepped in to try and stop it. Now, Sony has new allies in that fight: Alphabet (NASDAQ:GOOGL) and Nvidia (NASDAQ:NVDA).
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When Microsoft announced plans to buy Activision for $69 billion, that left Sony on the back foot as it wondered where it would get access to titles like “Call of Duty,” one of the biggest names in the first-person shooter space. That’s where Alphabet and Nvidia stepped in, particularly given Microsoft’s ambitions in the mobile and cloud gaming market. Microsoft plans to put Activision-Blizzard’s King division to work, making what Xbox leader Phil Spencer called an “Xbox Mobile Platform.”
Alphabet, for its part, was concerned about Activision giving Microsoft potential dominance in the mobile and cloud gaming space. Alphabet’s work in the mobile and cloud gaming space has been extensive; to lose its own position therein would be a disaster. On the other hand, Nvidia wasn’t especially concerned, though it joined in anyway on a more ideological stance that everyone should have ready access to games. Though Nvidia also has a cloud gaming presence—GeForce Now—that would be threatened by a dominant Microsoft.
The companies involved here all have a stake in this, and their positions in the market vary wildly. For example, analysts consider Alphabet stock a Strong Buy. Thanks to its average price target of $125.94, it has an upside potential of 37.49%. However, Sony is only a Moderate Buy, and its average price target of $102 gives it the weakest upside potential of the lot at 19.17%.
