Konami And Capcom Together?
Laptop Battery Analysts from Bloomberg have recently written an article describing the current state of affairs for Konami and Capcom. The business publication feels that Konami, the fourth largest publisher of video games, and Capcom, the sixth may be in line for a merger.
The publication cited financial concerns over rising development costs as the paramount reason for this possible merger. With next generation gaming on the horizon, the cost of doing business is expected to rise greatly for both Japanese companies.
"Rising costs and falling profit margins will speed up consolidation in the industry," said Michihiro Ishizuka, Konami's executive officer in charge of game software business in Tokyo. "Buying companies with know-how and infrastructure for online businesses would make a lot of sense for us."
Bloomberg cites the recent mergers between Square-Enix and Taito as well as Bandai and Namco as rational behind the proposed conglomeration. Stock figures for these companies have risen dramatically since their respective mergers.
The value of Namco's stock rose some 29 percent after announcing their strategic partnership with Bandai, who's shares rose 14 percent.
Konami's effort to diversify their product line are also cited as a possible reason for a future merger. Recently, the publishing giant purchased Hudson Soft, an online gaming company which also produces content for mobile phones.
In addition, Konami has shown previous interest in entering the toy market, as they have purchased a stake in a major Japanese toy company.
Given the companies interest in establishing a solid foundation of profit, analysts feel that an investment in Capcom would ultimately prove to be worthwhile.
"Capcom is probably the most likely candidate for acquisition or merger out of the remaining large companies. The company is in a difficult situation financially," said Hiromu Takada, an analyst at Cosmo Securities Co. in Tokyo. "The most effective of possible combinations for Capcom would be if Sega Sammy bought the company."
Capcom is set to report a loss for the current fiscal quarter, so their is a probably chance of merger for the twenty year old company.
Stick with the Advanced Media Network for continued coverage of this breaking story as we will update as soon as further details develop.
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