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If you enjoy reading this site, you might also want to check out these Think Services sites:
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 GamerBytes (for the latest console digital download news.)
 Worlds In Motion (discussing the business of online worlds.)
 Game Set Watch (the Group's alt.game weblog.) |
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Electronic Arts, BioWare, Pandemic: The Conference Call
by Brandon Boyer, Staff
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October 11, 2007
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Following the announcement of Electronic Arts' acquisition of BioWare and Pandemic for over $800 million, EA held a conference call to explain the move to press and analysts, and Gamasutra was listening in to get the full details on this major deal.
Firstly, EA CFO Warren Jenson commented that his company has "had our eye on these studios for several years", and underlined the main reason for the acquisition of the two developers - that it "fills out a gap in our genre line-up". In other words, where EA was under-represented in RPG, action, and adventure titles, according to CFO Jenson, the BioWare and Pandemic purchase has now helped fill the gap.
In fact, Jenson claimed that 36% of the North American and 29% of the European markets were in these key genres, hence the acquisition. He noted that the two firms will bring 10 franchises to market in the next 6 years, and more expansion into the MMO space was planned. Overall, he stressed, it was "an important step for us in driving growth and profitability".
Next up was John Riccitiello, who formerly headed up Elevation Partners (the company that included BioWare/Pandemic parent VG Holdings) before rejoining EA as CEO earlier this year.
He commented that the deal was "a strategic move that speaks directly to quality, online, growth and new IP" for the publishing giant, also disclosing, for the record, that he may receive some personal gain due to a residual interest in Elevation Partners. In fact, an independent board within EA supervised the takeover process due to the potential conflict of interest, according to the CEO.
The question and answer section was particularly hot on which IPs will transfer over to EA, and the company noted that Mass Effect is published by Microsoft, but the intellectual property now belongs to Electronic Arts and would conceivably from here out be EA published.
In addition, Pandemic owns IPs such as Mercenaries and Saboteur - and in fact, the upcoming Mercenaries 2 will be the first game to appear from this deal. The executives did note that the Pandemic created Destroy All Humans IP was now owned by THQ, and wouldn't be included in the deal.
Also asked was how IP might lend itself to Nintendo's DS or Wii, and John Riccitiello revealed that there is Nintendo platform development underway in both companies, with several unannounced titles in addition to the Sonic The Hedgehog RPG for DS already in development by BioWare.
In addition, technology was dealt with, and EA noted some key areas of innovation, particularly the dialogue engine in Mass Effect, in addition to proprietary engines, that might be of use to Electronic Arts down the road.
As for how the 10 new franchises spaced out over the next few years, the company confirmed that it would be fairly evenly over the 2009, 2010, and 2011 fiscal years, revealing that the BioWare MMO currently in development at BioWare Austin is planned towards the back half of that three year outlook.
Asked what the deal brought to BioWare and Pandemic, Riccitiello said that as independent developers, the two spent a lot of time courting independent publishers and negotiating deals, and EA would effectively simplify that process to zero, offering them the leverage of EA publishing which could extend the two studios into places they don't traditionally get, including online and in the mobile sphere.
Finally, asked how this new deal compared to those Riccitiello oversaw in his first seven years at EA, he said it could be comparable to Maxis and Westwood, though admitted that both were significantly smaller studios with properties that were still heavily in development -- The Sims and Command and Conquer, versus the strong established IP of both Pandemic and BioWare (though, he admitted, The Sims has "paid for the acquisition many times over.")
Riccitiello explained that relative to timing, this acquisition was a very good deal. Over the past few years, he said, independent developers have seen a number of challenges both in mastering next-gen platforms, and difficulties managing multi-platform releases. In BioWare and Pandemic's case, though, EA is "getting in on the back end with developers that have mastered those difficulties" -- saying the acqusition comes "post-risk."
[UPDATE: Details added on comparisons to previous takeovers, independent board to help conflict of interest on acquisition.]
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