Officials from private equity firm Elevation Partners have announced that the company has bought majority stakes in developer BioWare Corp. and Pandemic Studios. Both companies will continue to operate separately but Elevation has formed a new holding company called BioWare/Pandemic Studios.
The deal has cost Elevation Partners $300 million, and is one of the first of its kind in the games industry, which has previously generally seen high profile buyouts of publishers, not developers. This is not Elevation’s first attempt to break into the games industry, though, with the company previously having been involved in the bidding for British Tomb Raider publisher Eidos Interactive.
Founded by ex-Electronic Arts president John Riccitiello in 2004 ,the company - which counts U2 lead singer Bono as one of its managing partners - has raised a total of $1.9 billion to invest in media and entertainment deals. Riccitiello will serve as CEO of the new holding company, which will have its headquarters in Elevation’s Menlo Park, California offices. Former Electronic Arts executive Greg Richardson will head marketing and business development.
Despite the centralized executive team, the two developers will continue to operate on their own, with the founders of each retaining stakes in their companies and seats on the board of the holding company, with employees also holding stakes.
BioWare Corp., best known for role-playing titles such as Baldur’s Gate and Star Wars: Knights of the Old Republic, will therefore retain its headquarters in Edmonton, Canada and Pandemic Studios, who have been responsible for titles such as Full Spectrum Warrior, Star Wars: Battlefront and Mercenaries, will remain in Los Angeles. The fact that both developers have historically close ties to publisher LucasArts appears to be a coincidence.
Elevation has likened the future operation of the holdings company to Pixar Animation Studios, where the studio creates its products and then the holdings company brokers them to publishers. This is intended to give more financial and creative freedom to the developers. "We look to Pixar as the role model," said Andrew Goldman, CEO of Pandemic. “We wanted to build something bigger where we maintained our independence as game developers."
"BioWare and Pandemic will use our new alliance as a launch pad for exchanging creative ideas, cutting edge technologies and top talent while retaining our distinctive cultures," added Ray Muzyka, joint CEO of BioWare Corp. "In a business where developers often must sell out to survive, this deal is refreshingly new: a partnership of equals."
