Leading publisher EA is extending its reach into the casual and social gaming sectors with another massive takeover
Video game publisher Electronic Arts is to acquire the social and casual gaming specialist PopCap in a deal worth $750m. The move, which has been rumoured for several weeks within the games industry, will see EA paying $650m, plus $100m in stock. The deal is expected to be closed in August.
Founded in 2000, PopCap is a massively and repeatedly successful developer of online casual and social games. Its simple yet addictive range of puzzle titles, including Bejeweled, Zuma and Plants vs Zombies, have been downloaded over 1.5bn times, and appear on a diverse range of platforms from PC to smartphones and games consoles. PopCap reported revenues of $100m in 2010.
Electronic Arts is one of the largest third-party publishers in the traditional video game sector and is expecting to report Non-GAAP net revenues of approximately $3.8-$4.025bn for the fiscal year ending March 2012. However, like other console gaming giants, the company has struggled to adapt to the digital games market, which revolves around casual downloadable titles rather than major retail releases.
In 2009, EA paid almost $400m for the Facebook game developer Playfish in an effort to push its huge range of brands into the social gaming space. Since then, the publisher has made valuable headway into the lucrative Facebook gaming market, where its titles have around 32 million monthly active users. With PopCap's own Facebook titles, Bejeweled Blitz and Zuma Blitz, drawing in a total of over 16 million monthly active users, the two companies combined will become the closest challenger to the current Facebook leader Zynga, creator of Farmville.
It is expected that EA will seek to expand PopCap's roster of titles to console platforms, as well as using the developer's expertise to take EA properties such as Battlefield, Dead Space, Fifa and The Sims into the social gaming sector. PopCap also adds stability and reliability to EA's business – an attractive proposition compared to the volatile console retail sales market.
"EA and PopCap are a compelling combination," said EA CEO John Riccitiello. "PopCap's great studio talent and powerful IP add to EA's momentum and accelerate our drive towards a $1bn digital business. EA's global studio and publishing network will help PopCap rapidly expand their business to more digital devices, more countries, and more channels."
"We picked EA because they have recast their culture around making great digital games," said PopCap CEO, David Roberts. "By working with EA, we'll scale our games and services to deliver more social, mobile, casual fun to an even bigger, global audience."
The deal closely follows EA's recent purchase of San Francisco-based social games developer, Ohai for an undisclosed but certainly much lower amount.
The purchase of PopCap will make waves in the games industry, where global revenues are set to hit $74bn this year according to research firm Gartner. However, EA is certainly not the only large publisher looking to buy its way into the growing casual sector. Last year, Disney bought successful social game developer Playdom in a deal worth up to $763.2m.
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Source: http://www.guardian.co.uk/technology/2011/jul/12/electronic-arts-buys-popcap
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