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Electronic Arts announced today that it's cut a deal to acquire longtime partner Respawn Entertainment (Titanfall, Titanfall 2) for $151 million in cash, plus as much as $304 million if Respawn hits certain performance milestones through 2022.
This is a big deal, literally and figuratively. It marks the end of Respawn's seven-year run as an independent venture, which began in 2010 when the studio was launched by ousted Infinity Ward heads Vince Zampella and Jason West.
In the years following, a good chunk of Infinity Ward's staff made the jump to Respawn to work on the studio's flagship Titanfall franchise. Though West eventually left the studio, Zampella has remained a lead figure for the Titanfall games, which have been published by EA.
In a blog post published to the Respawn website, Zampella stated that he plans to continue running Respawn in addition to his new work as a member of EA's studio leadership team. He also claimed that work will continue unabated on both the Titanfall franchise and the studio's unnamed Star Wars project.
"We’ve had success as an independent company but as we look to how we want to compete in the future, and the challenges that face us in a rapidly changing landscape, now is the time for us to combine forces with a global industry leader like EA. While it wasn’t necessary, going with EA made a lot of sense," he wrote.
"I will still be running things at Respawn and will also be a part of the studio leadership team at EA. There will be no layoffs or major organization changes within Respawn. All games currently in development are continuing as planned."
The terms of the acquisition state that Respawn will now be a part of the EA Worldwide Studios division, alongside outfits like Motive Studios and Ghost Games.
In addition to the afore-mentioned $151 million in cash up front, EA has agreed to pay "up to $164 million in long-term equity in the form of restricted stock units to employees, which will vest over four years", as well as more cash (up to a maximum of $140 million) based on "achievement of certain performance milestones, relating to the development of future titles" through 2022.
Incidentally, this news comes less than a month after EA made a public show of shutting down Visceral Games and overhauling its Star Wars game by passing the reins to an EA Worldwide Studios team led by EA Vancouver.
Update: According to a source trusted by Kotaku, EA made this deal in part because Nexon Entertainment (which publishes the F2P Titanfall mobile game Titanfall: Assault) recently made a formal bid to buy Respawn.
The sequence of events, according to Kotaku, is that Nexon made a formal bid to buy Respawn, and Respawn was then obliged to give EA "right of first refusal" and allow it 30 days to make a competing offer. EA proceeded to shut down Visceral Games and outbid Nexon to buy Respawn.