NBCUniversal explores entry into video game business after Comcast split

NEW YORK: Comcast is amputating its fading cable limb, and NBCUniversal already has its eye on a new toy: video games. Three people with direct knowledge of the matter say the studio behind Peacock and a deep film and television vault is exploring digital gaming and entertainment franchises as it readies for life after the split, even as no tie-ups have been discussed and any deal would wait until well after the separation closes.

Comcast’s cable and connectivity arm, by contrast, is being primed for a different future: heavy technological investment to ride the data-centre and AI boom. Brian Roberts, chief executive of Comcast, told Reuters the split was simply the better path for two businesses that needed independent management and dedicated capital, denying it was a prelude to further dealmaking, while bankers and analysts reckon NBCUniversal’s studio, theme parks and Peacock could yet prove an irresistible takeover target once the dust settles.

One name doing the rounds: Netflix, which a person familiar with the matter says could eye NBCUniversal’s content library as strategically complementary, though regulatory and structural hurdles loom large. Comcast will retain a 19.9 per cent stake in NBCUniversal post-split, selling down over time, while NBCUniversal must operate independently for at least a year to preserve the arrangement’s tax-free status, a clock that resets the M&A conversation rather than killing it.

The gaming ambitions are not coming from nowhere. Michael Cavanagh, who takes the wheel at NBCUniversal after the split, has talked up the freedom to chase adjacent businesses, and Roberts’ own son, Tucker, runs Comcast’s gaming division and has pushed his father toward Korea’s e-sports market. Comcast has previously circled Activision and Electronic Arts and taken a stake in Fortnite-maker Epic Games, while its Nintendo partnership has already delivered two billion-dollar movies in the Mario franchise.

The timing could hardly be juicier. Electronic Arts is being taken private in a $55bn deal backed by Saudi Arabia’s Public Investment Fund, Silver Lake and Jared Kushner’s Affinity Partners, still awaiting European Commission sign-off, while Microsoft’s Xbox unit, home to Halo and Fallout, may itself be spun out as a standalone company. Take-Two, meanwhile, sits on perhaps the industry’s juiciest crown jewel: Grand Theft Auto VI, whose sixth instalment has already banked more than $3bn in preorders ahead of its 19 November launch.

Wall Street, for its part, cheered the Comcast split hard, sending shares up as much as 20 per cent and Charter’s stock up 25 per cent on merger chatter. The pipes-and-content marriage that never quite made sense to investors is over; what NBCUniversal builds next, console wars and all, is the sequel everyone’s now watching for.