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Report: EA In 'Late Stages' Of $1B PopCap Acquisition
Report: EA In 'Late Stages' Of $1B PopCap Acquisition
June 23, 2011 | By Kris Graft

June 23, 2011 | By Kris Graft
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Major publisher Electronic Arts is in "late stage" discussions to acquire Seattle-based Plants vs. Zombies developer PopCap for $1 billion, according to an unconfirmed report citing anonymous sources.

AOL-owned TechCrunch on Wednesday night claimed that two sources had named Redwood City, CA-based EA as PopCap's buyer. Neither EA nor PopCap have offered a confirmation of the deal.

If the unconfirmed report turns out to be true (other reports have cast doubt on the plausibility of such a deal) a $1 billion price tag would substantially overshadow EA's 2009 acquisition of social game developer and Pet Society maker Playfish, which the publisher bought in a deal worth up to $400 million.

$1 billion also represents over 13 percent of EA's market cap, the report pointed out.

A PopCap buy would be part of EA's attempt to gain a greater foothold in online markets -- or as TechCrunch put it, a "Hail Mary pass from EA to break into mobile and social gaming."

PopCap reportedly brings in annual revenues of $100-150 million. Social game giant Zynga, which has made a string of acquisitions over the last several months, also reportedly looked into a PopCap buy.

PopCap recently said that it could go public as early as November this year. CEO Dave Roberts said in May, "We are very much in the process of preparing a listing."

"... Whenever you [talk about filing] an [IPO], youíre pretty much guaranteed that someone will come and try to buy you," he said at the time. "Our goal is not about an exit at PopCap. Itís about creating this legacy of games that mean as much as Monopoly and Scrabble to the world."

As new online business models continue to supplement -- and in some cases supplant -- physical retail models, EA has been making moves towards adopting a broader digital strategy.

EA CEO John Riccitiello said in May that the publisher is switching from a "defensive" strategy of cost cutting to a more "offense"-based strategy that will focus on highlighting the company's stable of owned IP, as well as a focus on talent acquisition.

Gamasutra has contacted both PopCap and EA for comment.


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Comments


David Clair
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WOW EA is going all out with entering the "social" space.... at a price of $1 billion and with Pop Cap earning around $100-150 million, this is a BIG time investment for EA, as it might be some time before the profits begin to show.



One a side note: It seems that EA always buys the develoeprs that I personally like.... and its been happening for decades... darn it

jared p
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All mourn the death of PopCap....

Jonathan Gilmore
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I'm still holding out hope for Bioware.

AJ S
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well 1 billion is a pretty hard offer to turn down... but still :(

J Jonas
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The rumors were bogus. I rolled my eyes when I read this given what I know, but I couldn't comment myself. This appeared in Kotaku's article about the same rumors, and it is accurate:



Update: Contacted for comment PopCap Games reps tell Kotaku: "Per company policy, we do not comment on rumors and speculation of this nature." Future PopCapper Jennifer Kye tweeted (then deleted) that TechCrunch's story was "Not true. Rumor debunked." citing a PopCap employee. Kotaku has also heard privately that the story is bogus.

Kamruz Moslemi
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What? The Bubble is evolving.



.

..

...



The Bubble evolved into a Burst!

Matthew Mouras
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Darn... and here I was hoping to buy Plants vs. Zombies only on Origin.

Ken Nakai
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Plus a $1b valuation for a company bringing in $100-150m is really high. 10-15X on revenue? Maybe on net, but not revenue. That's either a terrible deal or the parties involved knowing something that no one else does...



I know, they're coming out with Vegetables vs Unicorns! The mega hit of 2012!!!

Ian Bogost
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Hey it's Ken Nakai!

Aaron Burton
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That's a hard deal to turn down. 1 billion. Its a matter of do you still have a passion for games? or can you pay the rent? But I'm sure popcap is doing pretty good. They might reject the offer. I personally wanna play insanaquarium 2 and plants vs zombies 2. If that means popcap staying intact then fine lol.

Joe McGinn
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Madness. The two company cultures are as incompatible as Heaven and Hell. I have heard these rumors were bogus, which would be for the best.


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