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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.
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.
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.
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 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.
You can't just buy 50.000001% of the common stock on the open market. Most funds won't sell to you because of their rules and buying that much stock will drive the price up.
So you find a buyer who will pay a premium as long as all the stock holders agree.
Even back in the 1980's and hostile takeovers you had to buy only 10% of the stock and get other stock holders to agree with your plan. Kind of like European parliaments and their dozens of parties.
If Microsoft could purchase EA and get exclusive Madden and Fifa, that could be a big swing.
Yeah, no, they'll just end up being acquired by Zynga, and releasing something abominable, like SimFarmMaddenVille.
I am John Hurt.
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 $14 dollars a share and YOU WILL LIKE IT!
[Red] Destruction. Go bankrupt.
[Green] Anti-synthesis. Split apart, releasing all the developers you gobbled up back to their formerly creative ways.
Social and Mobile gaming appeals to a very small overlap of EA's traditional core audience: invested gamers. Moreover, EA has its own mobile gaming arm.
EA is tanking because it has tried to cover ALL the bases (Xbox, Playstation, PC/Mac, iPhone, Android, Kindle, Facebook...) and has thus lost the ability to accurately and reliably cater to a single audience. EA has become so big that, like an octopus that has too many arms, can't manage to feed itself.
If they want to survive and be genuinely profitable, they need to Ma' Bell it up, divide their separate divisions up into actual self-sufficient companies and see who sinks and who swims. Focus on your audience, not the entirety of the Earth's population.
http://www.youtube.com/watch?v=F3PGbF87hNw
They nailed this one.
I'd buy two just to burn them in a public execution.
"EA has been struggling against growing trend of social and mobile gaming."
wrong, they have been struggling with overpriced shitware
investors led by Lord British. That would learn them for messing up Origin Systems.
Did you know 80 to 90% of the moderators on slashdot wouldn't recognize a troll even if one dragged them under a bridge.
Zynga isn't doing so well lately, either.
It's like two Christmases in August. The only thing that could make this better is Activision's overnight implosion.
You mean people find it easier to use other games than their crap DRM-laden game stuff like MASS Effect III which I've yet to get to run on my machine -- and am have been unable to contact their customer support because my email (ea@) is now "illegal" to contact "ea" with? (Still has my MEII and Dragon-AGE player records under that login, but now it's an illegal login for customer support.
Complete and utter Aholes. Hope they get 20c/$.
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 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.
They'll feel a need for speed with their stock price falling.
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.
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.
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?
The kernel isn't so important for something like game development, as the libraries.
And the only thing Android has in common with a standard Linux distribution is the kernel; it's actually easier to port a program from a standard Linux DE to Windows than it is to port from Linux to Android, IMO.
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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.
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