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Electronic Arts Up For Sale?
John Wagger writes "One of the world's largest gaming publishers and developers Electronic Arts has quietly put itself up for sale. While there have already been talks with private equity companies, the talks have not resulted in anything concrete. One of the sources is saying that EA would do the deal for $20 per share (currently at $14.02). Over the past year, EA's stock price has fallen 37 percent. Like other major game publishers, EA has been struggling against growing trend of social and mobile gaming."
EA has a long history of pressuring developers to rush out projects before they are ready. If they claim they are struggling to compete with social gaming, it has way more to do with people not having to download 3 additional patches a game to get a finished product than social gaming being more popular.
Yep, it's totally the market and not the universal hatred that EA has garnered from the gaming community.
Meanwhile: http://www.gamesradar.com/valve-reports-seventh-year-100-sales-growth-steam/
Or perhaps they are struggling with the repercussions of how they treat their customers.
by putting out the same shitty content for 60$+DLC over and over and reducing the player base as they escape to social gaming to find what they want.
Is still upset about Mass Effect 3.
My kingdom for a donkey!
Maybe they should have partnered and kept their products on Steam rather than trying to compete against Gabe. Lord knows I haven't played a PC game from EA since they took all their products off Steam.
The wicked witch is dEAd!!
I would like to imagine that any financial problems EA is seeing are also a result of their shockingly poor handling of developers, unethical treatment of customers, misguided use of DRM, and famously incompetent management.
It's got to be someone with the same sets of goals, primarily being evil. There are only a few companies I can think of that are evil enough to possibly buy EA.
First off, in the games arena, there's already Zynga. A ZyngEA merger would create the ultimate evil games company.
Next up, in media, would probably be ComcastNBCUniversal. They've got wide coverage in the world of entertainment, and would definitely have some evil synergy with EA. ComcastNBCUniversalEA would also provide 30 Rock with some new material.
Finally, if mobile is where they see themselves lacking, why not AT&T? They're regularly hated by their customers, yet manage to prevent most of them from leaving. EA could definitely benefit from this sort of customer lock-in. EAT&T could really screw with quite a few customers. Dropped calls could become a new game, for example.
anyone who plays games that use EA's "always connected" DRM are going to be screwed shortly.
Anons need not reply. Questions end with a question mark.
They have great titles, but are run by a bunch of morons who don't release anything new without dragging it through the mud (DRM, etc).
wonder which company /. will more readily get behind.
http://interserver.net/
Dear Gaben, please use some of that money you keep in your money pool to buy EA, and then make it awesome.
How does any entity sell all of something at a higher unit price than to buy one of something? How does that represent a reasonable deal? I'm really wondering.
franchises?
Nevermind all the screwing their customers stuff, I used to play/buy ever NFS game from Underground to Undercover, Although honestly car-wise they peaked at NFS:U2 (Which while being an 'arcadey' style game, actually had better tuning options than anything, except Gran Turismo and a few hardcore sims, and could actually be considered better than many other games since it allowed both engine and turbocharger tuning characteristics, in addition to the usual suspension and aerodynamic options). Between paying for extra cars, the loss of piecemeal bodywork tuning in Most wanted and above, the ever shoddier arcadey physics models (NFS:U still has relatively nice physics 9 years later. U2 was okay, MW,Carbon,Prostreet,Undercover all sucked, Shift seemed like an improvement but between the lack of bodykits and the unbalanced cars it wasn't worth more than an hour or two played at a friend's house. Combined with the latest NFS offerings being made into arcadey action-adventures that don't translate well to steering wheels I fail to see how the ever inflating budget for the games is justified. Test Drive Unlimited 2 from Atari suffered from the same sort of Arcadism, although as a larger and truly open world driving experience it at least has more playability.
Given that the Modern Warfare games seem to be following the same trend, and honestly not much has changed in Madden in what, a decade? I'm more surprised that EA is only running into trouble now from a production point of view. And combined with the brain drain from their abusive employment policies I'm surprised it took them this long to come to that conclusion.
While I imagine this is just going to lead to an every decreasing number of ever-more-fascist 'Big Name' publishers, perhaps this is a real opportunity for a surge in smaller studios displacing the large corporations, and perhaps reducing the drm to measures more palatable to my continued gaming interests (having not bought a new game in 2+ years, the last being X3:TC, which has barely been played.)
EA certainly has a lousy reputation; but it strikes me that video game publishers in general would be a very odd thing to purchase whole if they are selling because of hard times...
Presumably there is the back catalog; but most games don't hold their value that well over time(not necessarily a serious issue if the game still runs on current versions of Windows and you can just shove it out as a download at impulse-purchase prices; but if the game is bitrotten or encumbered in some contractual issue, you probably aren't going to be able to charge enough to make it worth fixing...).
There are also likely some developers/artists/etc. but the demographics of game industry workers seem to skew toward young and mobile. Especially if the ship is sinking you can probably hire them piecemeal, and you can't necessarily retain them if you buy the whole thing.
Would you be paying for the various franchises? How much is it worth to legally sell "Command and Conquer: Kane Cashes It In" vs. selling an otherwise equivalent grim-near-future-warfare-and-alien-minerals RTS?
Surely "Origin" can't be worth much more than the precious metals in the servers it runs on, minus the cost of extracting them.
Again, EA seems like a particularly unpalatable purchase; but I'm a bit confused about the idea of buying any down-at-heel publisher. It seems like being down-at-heel suggests that the whole is not greater than the sum of the parts, and that most of the parts are either optional, not very valuable, or available for purchase either by offering them a bigger paycheck, or by bidding on a chunk of the publisher's corpse...
I knew when I saw Poppit that they had to be going down the tubes in a big hurry.
Nobody I know actually likes EA. They lie incessantly-- not a single piece of the Spore hype was true.
It's a pity that so many great franchises will go down the tubes with them, but those have mostly been sucked dry by now anyway.
I mean, they probably don't have enough cash, but if they do I'd be quite happy with that outcome. The more 'bad' companies that consolidate under one name, the better. Make it easier to know when to drop a title and run.
Besides, I'd just love to see what Zynga could do with SWTOR. Integrate with your facebook friends? Add 67 more friends to be able to buy a light sabre from the store, OR buy credits directly from Zynga. Just about $900 a month or a few thousand friends should make sure you have a pleasant gaming experience. Hey what are you complaining about, it's FREE TO PLAY! Not their fault if you don't have enough friends, or money, to play their free games.
I almost never bother posting here but now I am simply compelled. The real reason why EA is for sale isn't social gaming or anything like that. The real reason is that they haven't made really good games, they know it, the company is slowly sinking, and they know that as well.
EA's strategy for the last 5-10 years has been to buy out smaller successful gaming companies, turning their games into indeterminate mash guided by the lowest common denomitator shared by the widest possible target audience they could think of. You don't make great games by that. You make only average games after you try to please the average player.
That's how they ruined completely for instance BattleField and Mass Effect. Rest in peace.
The new platforms have opened the door for new kind of more segmented and more fun gaming. EA knows this also, and they are scared shitless. It's better for the present owners to cash in what they can and run.
If Microsoft could purchase EA and get exclusive Madden and Fifa, that could be a big swing.
Almighty GabeN,
We pray to thee, save this company from its cruel masters by consuming it. There must be a way.
I believe we're going to see a lot of the big studios fall on hard times over the next few years, and it'll be a few more after that before things recover again. In many ways, we can look to the movie industry as the harbinger of things to come in the games industry precisely because both industries got to be where they are thanks to rising technology that grew in step with public tastes. What's interesting is that since about 1980 we've seen in thirty or so years what took sixty years to accomplish in cinema.
At first, it was just people stretching technology as far as they could. "I can, so I will." became "I must so I can compete." Graphics, voice acting, music grew more and more ambitious, more and more expensive. From games for the SNES that could be produced for less than half a million (well, ~$775,000, adjusted for inflation) to something like Mass Effect 3, whose budget is 25 million for development and several times that for marketing. What we're seeing right now is the approaching impossibility of further inflation in budgets. Games like Star Wars: The Old Republic cost somewhere north of $200 million to produce (For reference, the inflated production cost for 'The Ten Commandments' if produced today would be $105,338,597). The stakes are so high that If the game isn't a hit from release day onwards, it has the potential to wreck not just the studio, but the publisher.
Simultaneously, you can watch as maturing tools lower the costs of the actual coding to the point that a person in his or her home with a good idea, determination and a hobbyist's budget can make a game that's good enough to sell a couple hundred thousand copies. These two worlds exist side-by-side for the moment, but they won't continue to do so forever. EA has made its money betting big – big stars and big budgets and epic marketing stunts – but investors are beginning to shy away from the risks they take and the damage a poorly-handled execution can damage both the IP (long term) and the company's share value (short term).
If they have any sense, they'll break the big megastudios apart (not necessarily from a business point of view, but in terms of internal organization) and refocus on many smaller, more profitable, less risky projects. Of course, that ain't gonna happen, but it's what should.
This part made me laugh, "EA has been struggling against growing trend of social and mobile gaming." You can only exploit a hit game for a few iterations before you have to get off your ass and come up with something new. But, it's hard to come up with something good when the talented developers get wise to your project [mis]management and either leave or won't work for you. http://ea-spouse.livejournal.com/274.html
[Blue] Control. You get $14 dollars a share and YOU WILL LIKE IT!
[Red] Destruction. Go bankrupt.
[Green] Anti-synthesis. Split apart, releasing all the developers you gobbled up back to their formerly creative ways.
Social and Mobile gaming appeals to a very small overlap of EA's traditional core audience: invested gamers. Moreover, EA has its own mobile gaming arm.
EA is tanking because it has tried to cover ALL the bases (Xbox, Playstation, PC/Mac, iPhone, Android, Kindle, Facebook...) and has thus lost the ability to accurately and reliably cater to a single audience. EA has become so big that, like an octopus that has too many arms, can't manage to feed itself.
If they want to survive and be genuinely profitable, they need to Ma' Bell it up, divide their separate divisions up into actual self-sufficient companies and see who sinks and who swims. Focus on your audience, not the entirety of the Earth's population.
http://www.youtube.com/watch?v=F3PGbF87hNw
They nailed this one.
"EA has been struggling against growing trend of social and mobile gaming."
wrong, they have been struggling with overpriced shitware
Zynga, etc, have SO successfully taken market share by, for example posting a $700M loss over the past twelve months.
What next, a car company that gives away crappy cars taking market share from Toyota, Honda, etc?
investors led by Lord British. That would learn them for messing up Origin Systems.
Did you know 80 to 90% of the moderators on slashdot wouldn't recognize a troll even if one dragged them under a bridge.
Only thing left now is for Activision to quitly buy EA and Hello Monopoly!
Their sports franchises are successful, but, because of the shit they have pulled in the past, I have sworn to never install another EA game on my computer, and with what they are doing with consoles, I'm at the very least hesitant to play EA games there as well.
You mean people find it easier to use other games than their crap DRM-laden game stuff like MASS Effect III which I've yet to get to run on my machine -- and am have been unable to contact their customer support because my email (ea@) is now "illegal" to contact "ea" with? (Still has my MEII and Dragon-AGE player records under that login, but now it's an illegal login for customer support.
Complete and utter Aholes. Hope they get 20c/$.
They aren't sinking because of social/mobile gaming, companies like Valve are currently flourishing. They're sinking because EA has become a bad company run by bad people, that puts out a lot of bad games. It's become way too big for itself, and now it's time for this hideous abomination to be put down. GTFO rEApers!
...Buy EA, and make System Shock 3. Then roll in the money. Hell, I'm sure plenty would even kill for a SS2 HD remake. I just keep reading that the series is in limbo because EA technically owns the trademark rights to the System Shock name.
If you believe the slashdot community is even remotely relevant to the future of the gaming industry, think again.
If either Microsoft or Apple buys it i am going to cry.
This Space Intentionally Left Blank
EA has a rich 30 year history behind it. In the past 5-10 years, more power has been put into the consumers hands and has negatively affected their revenues. This is a general trend for the entertainment industry, where a movie/game/etc. can be killed within a day or two of being released. Not defending EA here, instead I'm saying they haven't responded well to this change in the industry.
Annual report is an interesting read:
1) High costs
- $4.1B revenue, $76M profit. Marketing was 21% of net revenue, General/Administrative was 9%, R&D was 29%. When the cost to sell the product exceeds the cost to develop it, there's a major problem.
- There's also a "cost or revenue" which ate into another 39% of the revenue. Other than third-party royalties which can't be avoided, this item looks really suspicious to eat up that big of a chunk.
2) Digital and mobile
- The report admits the current models of AAA console games needs to shift. The risk+cost is too high. Digital and mobile games at a lower overall cost and via direct sales to consumers works better. The acquisition of PopCap will hopefully gain them a strong brand to start in the mobile space. The Sims will continue to dominate the social space.
- I personally think Origin has a chance with PC gamers. However, it has started out really really poorly. You don't take a AAA title and throw a half-baked Beta digital distribution platform against it. For console games, I think digital distribution COULD work if done right. I'm not confident in EA's management to pull it off though given how poorly Origin started out on PC.
3) Work with your Customer ... focus on the customer. I see absolutely nothing listed for how they plan to incorporate their customers into their business model. You can't go into the digital or mobile space and expect to succeed without this incorporated into your strategy. Steam, Facebook and Apple all have gotten a LOT of things right in this regard, like them or hate them, they've gotten it right. ... after the end of EAs fiscal year (March 31st). This would have resulted in a huge loss for the year rather than a small profit.
- Of all the things the annual report is missing
- EA needs to work with their customers, not against them. Do not pull another Command and Conquer 4 and introduce radical change in gameplay to completely destroy one of the best and longest running game series. Do not announce / force a specific release date for a game ahead of time if it needs more polish ala Mass Effect 3.
- Do not focus so much on the short-term, you are destroying your brand equity longer-term by doing so. The tinfoil hat part of me suggests the Extended Cut for Mass Effect 3 was planned all along, but would have taken too long to release
A private purchase may return EA to profitability. It needs some significant changes and this may be the ticket to do so. Really feel sorry for the employees of the company ... they were already putting up with 60-100 hour work weeks ... this will just make things a lot worse. Probably better than the company folding, but not by much.
Lots and lots of game companies focused on Windows.
Had they targeted Linux, Android would be a nobrainer and Apple would be an option, being *BSD-like and all (though I really don't know iOS).
But, hey, they can go for the 1% Windows Phone already "achieved". Oh, sorry, I think it's about 1.5%...
Hahaha, losers...
You seem to be in a bad mood. All. The. Time.
I'll just leave this here for you.
Facts and Opinions
This time, there isn't even a question, and the editors are still putting a question mark in the title. They're in a rut.
How many years can they milk the sequel cow.... Madden 500? I got off that wagon years ago.
Remove the DRM bullshit and my wallet will open MUCH more widely to game publishers. I do not want MY resources to be used to help you maintain exclusivity of distribution. Yes, I know that it is critical for your business to maintain exclusivity of distribution... but it will not be my problem. I used to buy lots of $30 games back in 2002 or so. Most sucked in some way so when prices doubled, I said, "screw it", and stopped buying games. I did buy Call of Duty 4: Modern Warfare a few months ago but then, I already knew it was worth my money. The last game I bought before that... I do not recall. Sometime before 2004 I am sure.
Sorry for rambling. It is all pointless anyways. DRM will always remain. It is like some sick control fetish that just can not be tossed aside like a nicotine or heroin addiction... and it just WILL NOT STOP hogging up resources, reducing framerates, and sccrewing up numerous other highly visible things. Relentless. :/
"Someone needs to talk to the tree of liberty about its ghoulish drinking problem." by ohnocitizen
Just merge it with Ubisoft and move their new headquarters to Mordor.
You should get a treadmill. They're great for people who don't exercise too.
Compare and contrast:
1990's titles:
Desert Strike
System Shock 2
Start of NHL series
Start of Wing Commander series
Start of FIFA series
Start of Need for Speed series
Ultima Online
Start of NASCAR series
Start of Command & Conquer series
Start of Dungeon Keeper series
Start of SimCity series
Start of Medal of Honor series
00's titles:
American McGee's Alice
Start of SSX series
Start of James Bond series
Start of Harry Potter series
Start of The Sims series
Start of Burnout series
Start of Battlefield series
Dark Age of Camelot
Start of Crysis series
Start of Rock Band series
Start of Skate series
Start of Mass Effect series
Warhammer Online: Age of Reckoning
Start of Spore series
Start of Army of Two series
Start of Dead Space series
Mirror's Edge
Start of Dragon Age series
2012 (expected) titles:
Madden NFL 13
The Sims 3: Supernatural
The Sims 3: Seasons
NHL 13
FIFA 13
NBA Live 13
Medal of Honor: Warfighter
Need for Speed: Most Wanted
Ultima Forever: Quest for the Avatar
EA have some fabulous games and series on that list. Trouble is they are all pre-2010, and all either introduced new genres or built upon existing titles well. The 2010+ titles? Just yet-another-iteration of some of their worst series.
Come on, EA, you bought up Bullfrog and any number of fantastic developers / franchises and then milked them to death while inflicting horrible DRM and pricing on your customers. How about doing what you USED to do, which was START series of games, not run them into the ground?
To keep things in perspective, a note that Activision is losing their venture capital. Both EA and Activision "the parent companies" are in trouble.
http://www.bloomberg.com/news/2012-06-07/vivendi-said-to-discuss-activision-unit-sale-on-june-22.html
Electronic Arts is the parent, Activision is the parent, they focus on shareholders, not the players. The companies especially the developers they buy, bring in house and begin to micro-manage are the ones focusing on consumer gamers - they make the product.
For EA, the store is more the product than the games contained within them and this is what EA doesn't grasp, that consumers aren't playing their stores.
The parent companies want revenue more than gamer loyalty. Game "players" are not their customers, shareholders are. Revenue comes from first sale items.
As evidence games from the big players are now DRMd, locked up behind electronic storefronts - the goal is to generate sales. Each patch is a sale, each modification is a sale, every outfit you buy, every chaki is a sale that goes to the parent company and their shareholders, even Microsoft does this with their XBox platform, want to change your handle name, better have purchase points to buy a name change.
Consumers don't expect to pay for bug fixes or updates as patches,
this is the handshake between gamer and developer that has been a tradition for many many years. Now parent companies that focus on their stores have broken that expectation contract between player and developer and wonder why their hemorrhaging players.
Players don't appreciate being told "where" they can play.
Piracy/DRM is an excuse to distract what's right in front of everyone, that the games are not their focus, the players who buy their games are not the focus - Running and selling items through a "store" is the product and their actual customers are the shareholders.
DRM forces eyeballs to their stores...
The always-on connection DRM means every time you log in, your passing through their store advertising "their real product", which is the store itself. Every time you log in, it's a potential sale which is their focus. Consider putting out a half baked game stills means up front sales.
Just a reminder that industry bloggers saw this all coming a while ago
http://massively.joystiq.com/2011/01/24/could-eas-history-make-investors-wary-about-swtor/
Take time to read through some of the feedback there, the list of complaints is long and descriptive.
EA isn't the company from many years ago that put out quality products that met gamer expectations, today it's just another player in Wall Street and we know how questionable those outcomes are.
What about Valve purchasing EA?
I wish bioware would buy them and start making games I would buy again.
Hopefully someone anti-DRM buys them out and lets EA games return to its former glory, instead of being one of the companies I will not buy anything from.
Single player = No Persistent Online Connection - It Broke my Heart to flip Blizzard off over it on Diablo 3 and StarCraft 2.
But they too joined EA games on the "NO BUY LIST" .
_ _ _ Go for the eyes Boo! GO FOR THE EYES!
Steam sales are great values for recent games. I picked up a copy of Portal 2 for a nephew for 5 bucks. It's also a great introduction for multiplayer gaming. Just over a year old game for that cheap is a great deal. I can see why steam is doubling their revenue every year.
Big game companies/publishers create shoddy products, emphasize too much with eye candy, too besotted with profits and monetization (freemium mode and DLC!), and are hardcore DRM whores.
I have boycotted all games churned out by the following three companies:
1) Activision/Activision-Blizzard (Diablo 3)
2) EA (Command and Conquers/Red Alerts, Mass Effect 3)
3) Ubisoft (Heroes 5 and 6, 3D Prince of Persia, Assassin's Creed)
Support indie game developers, or at least those companies who don't dick around with you.
Games should be developed as a form of artistic/intellectual expression, and not as a means to keep shareholders happy.
Great, now maybe I won't have to deal with seeing a new Madden NFL game every year that is nothing but the same thing from last year with updated rosters and a single (if that) new feature that could have been a 15 MB patch added to the last years version.....
People paying $60 every year for something that should have been nothing more than a $2.00 DLC update, if that. Glad to hear people are FINALLY wising up to that.
struggling against "social and mobile gaming" my ass. They are in this position because they force developers and dev studios to meet extremely specific deadlines that any who knows anything about software can tell you is impossible. Mobile and Social games have nothing to do in their downfall in no way whatsoever. Forcing games to be pushed out before they are ready with truckloads of bugs and glitches and killing franchises by forcing their "opinions" onto developrs contrary to what the PLAYERS or developers want is what is killing them. Hate DRM, or have had major issues with it? *looks at EA* , buy a game from a known popular franchise that is almost unplayable or completely different than games previously in the serious... *looks at EA* Have any tech questions and EA bans you from their forum and or refuses to answer your question and as a last resort to please you refuses to give a refund *looks at EA*.
I could go on and on and on and on and on and .... yeah you get the point. Sure it's not always the fault of EA but I bet the majority of issues that contribute to the circumstances EA is in now are due to it's own doing. EA and basically every other major studio seem to think that just buying up major game franchises that are successful and telling them what to do for the next version will = money(lots), and lots of new players. This is completely false since the direction the studios seem to want most of their game franchises to go in for the next version is completely "pants on head retarded". perhaps firing the majority of upper managment which has proven to be incompetent if they are looking to sell themselves...... should all be dismissed immediately. You need people that know WTF is actually going on and have some idea both what their player base is looking for and of course HOW TO PUT THEIR FUCKING PANTS ON.
Companies, stock holders, CEOs etc just squeeze any company to the point of death demanding more profit then move on to the next company, EA is just another company in the list.
Yeah EA is a terrible company for many reasons, they have bought several companies I loved and ruined the games. Maybe I am wrong and a good company will buy them up and restore some of the titles to their former glory....
s/©//g
I thought I hated EA, but then I bought a Ubisoft game. In comparison to Ubisoft, EA is like Santa and Mother Theresa combined
EA has been struggling with releasing poor products and then not improving them. I'm just one of many geeks in my immediate circle that have vowed never to purchase an EA product ever again, no matter how awesome or popular it is.
Goodbye EA, and damn good riddance!