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Apple Eyeing EA?
yerktoader writes "There are rumors that Apple might buy EA, but some interesting counterpoints abound. File this one firmly under 'unconfirmed,' but it's nevertheless a tantalizing rumor. According to Fast Money's Guy Adami, Apple is 'eyeing Electronic Arts as a takeover target.' EA is currently the second-largest games publisher in the world and owner of the smash hit NFL-licensed series of football games. Could we be facing the possibility of an iMadden? Well, probably not. Apple has indeed been bolstering its games know-how, hiring a major Xbox strategist away from Microsoft in recent weeks. And EA is no stranger to Apple platforms: in the last year it's brought several of its major franchises to the iPhone (with more on the way), including Sim City, Tiger Woods, and Spore, with considerable success. But it's a far cry from there to a takeover, and that's putting it mildly. Video games analyst Michael Pachter seems to agree. Speaking to Gamasutra, he pointed out that if Apple was looking to make some entertainment acquisitions, it could buy Warner Music — which controls 20% of the music industry — for roughly half of EA's estimated price."
Nothing.
How many rumours of Apple wanting to buy companies is Slashdot going to post this week?
It would be really nice to see some quality EA titles for the Mac versus quick and sleazy ports - but it won't happen, and I am not saying that just because it's a rumor. Of course, if Apple really financially enticed EA to make titles for both PC and Mac - and *really* worked with developers to make games work on the Mac OS X platform to the levels of performance people come to expect from the PC only market - then EA could really make some money with games for the Mac.
Sadly, as it is right now - they are more than happy to let Aspyr hoover up the residuals making sadly ported versions of their games on the Mac platform.
It might be worth their while to buy a small stake in the company just to ensure that the blockbuster games get ported to Mac, but it wouldn't make much sense for them to buy the entire company. Although the gaming industry is getting bigger, I think it might be more beneficial for them to target the living room through something like their Apple TV. Otherwise they would need to release their own gaming console and even though they've got the money to burn, it's probably cost Microsoft some $8 billion just to get the point they're at now where they can start trying to make some of that back.
It would probably make more sense for them to negotiate some deals where content providers would allow Apple to rent TV shows to iTunes customers for a fraction of what they charge for a purchase and get Apple TVs into as many homes as possible. If they could work some kind of worldwide distribution as well they could easily target the huge market that Hulu leaves out due to regional restrictions.
Everyone seems to be spouting rumors about who Apple is going to acquire. I think someone saw how much coverage the Apple/Twitter buyout rumor got and decided that it'd be fun to garner a few additional hits to their blog or second rate news site. I think I'm going to go spin a rumor about Apple acquiring Adobe and pull in some ad revenue when other sites pick up the story and link to me. Of course, unlike all the other stories, this one is true. I have it on good authority from someone inside Apple and there's no reason I'd ever lie about that.
None, EA Bought them all.
EA has a market cap of 6.5 billion. Apple has over 20 billion in cash and short term investments. Even with a hefty control premium, they could easily acquire EA. If they were only interested in a majority share, so that they could force more consideration of their platforms, it's even easier.
http://bgcommonsense.blogspot.com
How big the video game industry is? If you take 20 seconds to look it up you'd see that EA has a market cap of 6.49 billion vs Apple's market cap of 115.25 billion. Where do people keep getting the idea that EA is so big, they're literally a small fry compared to Apple.
You gotta find first gear in your giant robot car
How big the video game industry is? If you take 20 seconds to look it up you'd see that EA has a market cap of 6.49 billion vs Apple's market cap of 115.25 billion. Where do people keep getting the idea that EA is so big, they're literally a small fry compared to Apple.
You mean they're figuratively a small fry compared to Apple. You should look up the meaning of literal.
He means literal in the figurative sense.
So exactly what have you done?
I see a post on Slashdot full of claims but no links to anything of actual substance. You almost sound like Steve Balmer claiming he's going to DESTROY GOOGLE. The fire and brimstone is there, for sure, but that's about it.
If you really want us to go along with your plan at least link to a website detailing what exactly it is you're doing. Your post is so vague that I'm not exactly sure what this 'stuff' I'm supposed to be doing entails. As far as I know, this wonderful Slashdot post is that first move you mentioned. I think you need a more defined cause before you try to rally people to it.
I don't know if it's true any longer, but I recall that Apple had some obscene amount of cash on hand that they could use to buy out a lot of decently large companies.
In fact, This recent news article states that they have around $29 billion just sitting around. It's no wonder everyone predicts they're going to buy company X.
The only real question is whether or not they'll be able to find a company that would be a good fit for them. Twitter and EA don't really offer Apple anything that fits with their current business strategy. They want to sell expensive high-end Mac computers and iPhones. The iPod has saturated the market to the extent that they really don't need any acquisitions in that area.
It would make more sense for them to throw a lot of money at Autodesk so that they would release a version of AutoCAD for the Macintosh. Think of how many high end workstations they'd sell to engineers and architects and other CAD users who could be convinced to try the Apple experience.
You could argue that gamers are a high end market, and to some extent that's true, but they're the type of people who like to constantly upgrade a box to stay on the bleeding edge. Apple likes to sell you new boxes, but doesn't really like you to upgrade them incrementally with parts from Newegg from which they won't see a dime.
If Apple topped out at 20% market share, but it was the professional market that purchased their top of the line, high profit margin machines, why should they care if they'll never crawl above that. Let the other PC markers enjoy their race to the bottom price wars to fight over the remaining 80%.
My prediction is that Apple will continue to do that. They want to be a leader in the consumer electronics field, and so they are going to spend those billions in a way that helps them do that. Does buying Twitter, a company without a business model, help them be a leader in the industry? If not, they're not gonna buy Twitter. Does buying EA help them be a leader in the industry? Apple makes hardware and software to operate that hardware, but they've never been much of a software company, so it doesn't help them.
True, games is a huge market, and one that Apple has missed out on. But Jobs' ego dictates that Apple is a technology leader, not a follower. They don't want to be a 'me-too!' company by jumping into a market with a shiny white console when the console market is already saturated between the Xbox 360, PS3, and Wii. Apple conquered a new market with the iPod and is a serious contender in the emerging smartphone market. Apple will continue to tackle emerging technologies, not established technologies like game consoles. My guess is that Apple will (1) expanded into portable, networked electronics that fill the gap between phone and laptop, and (2) try to do for the TV what they already did for music. They've already tried that with Apple TV. It hasn't taken off yet, but it's a step in the right direction.
Steve Jobs said he wanted Apple to be the new Sony, that is, to be the leader in consumer electronics. At the time, I thought Jobs was either out of it, or being typically grandiose. But over the past ten years, this is exactly what Apple has done.
Very good point. The reason Apple is kicking Sony's ass from hell to breakfast is precisely because Sony can't decide whether they're a hardware company or a content company. They're a house divided against itself; every time the hardware guys want to do something cool, the packaged-entertainment side of the company overrules them.
So, yeah, if Apple wants to be the next Sony, then buying EA is exactly what they'd do. And that would be great news for whatever startup is waiting in the wings to take Apple's place.
As for point #1, replacing your DRM-laden songs. Now that is typical Apple - typical American corporate beast. They didn't even offer the option, trade up to DRM free (with higher sampling bitrate) for 30 cents.
Incorrect, you can upgrade songs in your library to a higher quality DRM free version.