NBCUniversal might start making video games
What's the story
NBCUniversal is looking to expand into digital gaming and new entertainment franchises, following its planned separation from Comcast, Reuters has reported. The move comes as part of a broader strategy to explore growth opportunities after the spinoff. Meanwhile, Comcast's cable and connectivity business is also set for technological investments amid a massive boom in data centers and artificial intelligence (AI).
Strategic move
Separating for growth
Comcast CEO Brian Roberts has said that separating the two businesses is the best way to capitalize on their respective growth opportunities. He stressed that independent management teams and strong assets would be key to this strategy. The decision comes amid a decline in television and film sales as consumers shift toward streaming, gaming, and social media platforms.
Market speculation
Potential M&A speculations
The announcement of the spinoff has sparked speculation about potential mergers and acquisitions (M&A) for both businesses. Despite Roberts denying any suggestion that the planned separation is a prelude to further deals, analysts say NBCUniversal's assets could be an attractive takeover target. These include its film and television studio, theme parks, and streaming service Peacock, which are seen as higher-growth businesses compared to declining cable channels.
Buyer speculation
Regulatory hurdles for potential deals
Netflix has been speculated as a potential buyer for NBCUniversal's studio and content library. However, any such deal would likely face significant regulatory and structural hurdles. As part of the spinoff, Comcast will retain a 19.9% stake in NBCUniversal which it plans to sell down over time to avoid taxes. To maintain this tax-free structure, NBCUniversal would need to operate independently for at least one year after the spinoff without pursuing any sale or merger during that period.
Future plans
Comcast's gaming interests
Michael Cavanagh, who will lead NBCUniversal after the split, said they now have the freedom to explore adjacent businesses. This comes as Roberts has long been interested in gaming. His son Tucker Roberts heads Comcast's gaming division and advised him on expanding into the Korean esports market. Comcast had previously considered acquiring Activision and Electronic Arts or investing in Epic Games, maker of Fortnite.