Microsoft Corp (MSFT) is making headlines with its decision to divest the Toys for Bob video-game studio, a move that comes two decades after its Activision subsidiary acquired the studio.
Toys for Bob, known for developing popular titles such as Skylanders and Crash Bandicoot N. Sane Trilogy, announced through a blog post by studio heads Paul Yan and Avery Lodato that it would be transitioning to operate as an independent studio. The studio expressed an interest in exploring a potential partnership with Microsoft, although the financial details of the divestiture remain undisclosed.
The decision to divest Toys for Bob is seen as an opportunity for the studio to return to its roots as a “small and nimble” operation, a sentiment that was echoed by the studio’s leadership. Activision has publicly supported this move.
Founded in 1989, Toys for Bob has had significant success, particularly with the Skylanders franchise, which combined collectible figures with video game play in an innovative way. The studio has also contributed to developing the Call of Duty franchise under Activision’s banner.
This divestiture comes in the midst of Microsoft’s $69 billion acquisition of Activision in October, the largest acquisition in the video game industry to date. The industry as a whole is currently undergoing a period of consolidation, marked by job cuts and game cancellations.
Earlier in January, Microsoft announced the elimination of 1,900 positions within its gaming divisions, impacting numerous employees at Toys for Bob. Similarly, Electronic Arts Inc (EA) has announced a significant workforce reduction, planning to lay off 5% of its employees as part of a broader initiative to streamline operations.
Other major players in the industry, such as Sony Group Corp’s PlayStation division and Tencent Holding Ltd’s Riot Games, have also undertaken substantial layoffs, indicating a broader shift towards consolidation and strategic refocusing.
Investors looking to gain exposure to Microsoft can consider ETFs such as SPDR Select Sector Fund – Technology (XLK) and Fidelity MSCI Information Technology Index ETF (FTEC), which have gained 10% year-to-date.
As of the last check, Microsoft shares were trading lower by 0.44% at $411.80 premarket.
In conclusion, Microsoft’s divestiture of Toys for Bob marks a significant step in the company’s post-Acquisition strategy, reflecting broader industry trends towards consolidation and strategic realignment.
