Electronic Arts Up For Sale? [Slashdot]

[DP ServBot]

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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." http://a.fsdn.com/sd/twitter_icon_large.png (http://twitter.com/home?status=Electronic+Arts+Up+For+Sale%3F%3A+http %3A%2F%2Fbit.ly%2FMDYRcU) http://a.fsdn.com/sd/facebook_icon_large.png (http://www.facebook.com/sharer.php?u=http%3A%2F%2Fgames.slashdot.org%2Fsto ry%2F12%2F08%2F18%2F1643240%2Felectronic-arts-up-for-sale%3Futm_source%3Dslashdot%26utm_medium%3Dfacebo ok) http://www.gstatic.com/images/icons/gplus-16.png (http://plus.google.com/share?url=http://games.slashdot.org/story/12/08/18/1643240/electronic-arts-up-for-sale?utm_source=slashdot&utm_medium=googleplus)

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[kupomogli]

You wonder why none of the first party developers try and acquire companies like this. EA would be a better company to own than Activision in my opinion. So many great IPs are owned and licensed to EA, as well as the many talented developers and other companies that they have under them.

[Griking]

Lets start a kickstarter to raise money to purchase EA.

[The 1 2 P]

You wonder why none of the first party developers try and acquire companies like this. EA would be a better company to own than Activision in my opinion. So many great IPs are owned and licensed to EA, as well as the many talented developers and other companies that they have under them.

The reason why nobody purchased Activision-Blizzard when it was available for sale the last few months(including Microsoft) is because they didn't feel like it was worth the asking price, which was supposedly somewhere between 8-15 billion. Had it been a more reasonable amount(think millions instead of billions) Microsoft or another suitor would have gladly purchased them. And the same shall apply to EA. Are they worth their asking price? It depends on how much they are asking.

[RARusk]

"I'll buy that for a dollar!"

[duffmanth]

EA and these other major publishers that have a million games on the go at any given moment need to scale back and focus on a handful of titles at a time and make some truly great AAA games. They need to stop pumping out these annual or semi annual sports games, Need for Speed games, WWE games, shooters, etc, with only minor tweaks from year to year and stop charging full price for them. Take the Apple approach and focus on a few things and do them really well. It's no coincidence that the best games come from developers like Team Kojima, Naughty Dog, Sony Santa Monica, Epic Games, Bunjie, Polyphony, etc, who only focus on 1 or 2 games at a time.

[Dobie]

The reason why nobody purchased Activision-Blizzard when it was available for sale the last few months(including Microsoft) is because they didn't feel like it was worth the asking price, which was supposedly somewhere between 8-15 billion. Had it been a more reasonable amount(think millions instead of billions) Microsoft or another suitor would have gladly purchased them. And the same shall apply to EA. Are they worth their asking price? It depends on how much they are asking.

EA would be valued at whatever the purchaser thinks their IP is worth. If they found the right sucker, who knows?

This situation reminds me of what Micheal Pachter said about Nintendo--he thinks their IP is worth 3-5 billion (if I remember correctly), but he believes the reason the company's market cap is significantly less than the IP's value is because investors discount management's ability to capitalize on their IP. I think the same may be happening to EA--the IP is some of the best in the business, but their management has lost the faith of investors and consumer confidence has eroded due to EA's business practices.

[Gameguy]

It could be fun to buy EA just to get the NFL game rights. Put out a new football game with all the current players, but only make the games for the CDi and 3DO. Sports nuts have to buy every new game every year so I guess they'll have to get a CDi or 3DO to play them. LOL

[kupomogli]

EA and these other major publishers that have a million games on the go at any given moment need to scale back and focus on a handful of titles at a time and make some truly great AAA games. They need to stop pumping out these annual or semi annual sports games, Need for Speed games, WWE games, shooters, etc, with only minor tweaks from year to year and stop charging full price for them. Take the Apple approach and focus on a few things and do them really well.

I agree. It's not like EA releases anything but yearly sports games, The Sims, and Need for Speed titles. Mirror's Edge, Battlefield 3, Dead Space, Army of Two, Dante's Inferno, Dragon Age, and The Saboteur were obviously released by other publishers.


It's no coincidence that the best games come from developers like Team Kojima, Naughty Dog, Sony Santa Monica, Epic Games, Bunjie, Polyphony, etc, who only focus on 1 or 2 games at a time.

These are developers that create games for whatever company is in question. Naughty Dog, Sony Santa Monica, and Polyphony Digital would be "Sony," just as DICE, Visceral Games, and Criterion Games are "EA." So just like Sony developers, each seperate developer owned by EA is focusing on one or two games at a time.

Not only that, but you're bitching about the same game with minor changes year after year, such as Need for Speed, yet you listed developers that have been releasing a long line of games that follow the same formula. Metal Gear Solid, Uncharted, God of Bore, Gears of War, Halo, and Gran Turismo. Each of those games' sequels are practically the exact same game with different maps, different story, better graphics, and a few minor adjustments to the gameplay mechanics. Not that Need for Speed is any good, or atleast isn't as good as it used to be, but the statement itself is pretty hypocritical.

[Robocop2]

It could be fun to buy EA just to get the NFL game rights. Put out a new football game with all the current players, but only make the games for the CDi and 3DO. Sports nuts have to buy every new game every year so I guess they'll have to get a CDi or 3DO to play them. LOL

I'd go one better and start producing the 3DO again since EA had a big part in that whole thing it seemed....:vamp:

[Graham Mitchell]

This is kind of mind blowing to me. They have acquired so many smaller developers, and churn out so many games a year that this comes as a shock to me. I knew sales were down a bit, but not bad enough to put themselves up for sale.

I don't really make a habit of following ea as a publisher, but they must have been doing something wrong for quite awhile to get to this point. Their drm and dlc/origin bullshit probably didn't help.


---
I am here: http://maps.google.com/maps?ll=34.125826,-118.158366

[Robocop2]

Just because its for sale doesn't mean they're about to shut the doors.....

also I found this humorous
http://www.dorkly.com/comic/42862/videogame-companies-are-your-friends

[Compute]

I wouldn't mind seeing an end to sports-license exclusivity. Innovation doesn't occur if there's nobody to innovate against.

[sloan]

I wouldn't mind seeing an end to sports-license exclusivity. Innovation doesn't occur if there's nobody to innovate against.

Agree.

But I thought I heard recently that EA lost some class action suit regarding NFL rights, and would have to allow other companies to start publishing competing NFL games. One can only hope...

[Gameguy]

I wouldn't mind seeing an end to sports-license exclusivity. Innovation doesn't occur if there's nobody to innovate against.
The license is really a crutch, companies can still make fun football games but they just want to rely on the licenses as it's an easier selling feature. Most people just want to play as their favourite player or team, they don't really care much about the game itself as long as it works. I haven't seen many recent games similar to Mutant League Football or NES Ice Hockey, I doubt most people really care anyway.

[Collector_Gaming]

The license is really a crutch, companies can still make fun football games but they just want to rely on the licenses as it's an easier selling feature. Most people just want to play as their favourite player or team, they don't really care much about the game itself as long as it works. I haven't seen many recent games similar to Mutant League Football or NES Ice Hockey, I doubt most people really care anyway.

in a way thats true. Think about how many sports fans go out and buy year after year the same game just with updated roster and really no complaints it seems. They don't care about the game itself but more so the fact that Peyton Manning's newest stats for the year are put into this game.

If only sports fans as a general not from a gamer perspective but as a general consumer perspective would say "maybe i shouldn't go spend 50-60 dollars on the newest madden game. Maybe EA should just add a extra model/character skin or 2 or a dozen and just update everyones stats and change helmets/jerseys on who ever switched teams and make 10-15bucks on a consoles download service like xbox live or ps network."

[duffmanth]

I agree. It's not like EA releases anything but yearly sports games, The Sims, and Need for Speed titles. Mirror's Edge, Battlefield 3, Dead Space, Army of Two, Dante's Inferno, Dragon Age, and The Saboteur were obviously released by other publishers.



These are developers that create games for whatever company is in question. Naughty Dog, Sony Santa Monica, and Polyphony Digital would be "Sony," just as DICE, Visceral Games, and Criterion Games are "EA." So just like Sony developers, each seperate developer owned by EA is focusing on one or two games at a time.

Not only that, but you're bitching about the same game with minor changes year after year, such as Need for Speed, yet you listed developers that have been releasing a long line of games that follow the same formula. Metal Gear Solid, Uncharted, God of Bore, Gears of War, Halo, and Gran Turismo. Each of those games' sequels are practically the exact same game with different maps, different story, better graphics, and a few minor adjustments to the gameplay mechanics. Not that Need for Speed is any good, or atleast isn't as good as it used to be, but the statement itself is pretty hypocritical.

My point is that for EA and other big publishers to stay competitive with console games in the age of mobile/social media games, they might need to scale back on the amount of games they release on a yearly basis. EA doesn't need to release sports games every year with minor tweaks and charge $60, the same goes for THQ with its WWE games. They should just focus their efforts on a handful of games at a time and make those games great. That was why I mentioned Naughty Dog, Team Kojima, etc. Yes their games follow the same formula overall, but nonetheless the games they produce like Uncharted and Metal Gear are the gold standard of the industry. They only get released every 2-4 years so you don't feel like you just played the game yesterday, as where the games that come out annually, you feel like you just played the same thing yesterday.

[G-Boobie]

Agree.

But I thought I heard recently that EA lost some class action suit regarding NFL rights, and would have to allow other companies to start publishing competing NFL games.

Sort of.

This is an important lesson for anyone who thinks that class action lawsuits work for the consumer, so pay attention: EA submitted the following settlement agreement to the judge after the plaintiff's lawyers approved it:

A) They would put up twenty seven million dollars to compensate anyone who bought a Madden game for Gamecube, Xbox, PS2, PS3, or 360. GC/XB/PS2 plaintiffs get seven bucks, PS3 and 360 plaintiffs get two. This lasts until the twenty seven million is gone (after the attorneys get paid), or the submission deadline passes. This ensures that EA will end up paying significantly less than twenty seven million.

B) EA has agreed to allow the NCAA license to go non-exclusive after their exclusive contract runs out in 2014... For five years. They are also prohibited from an exclusive license with... Arena Football for five years.

Please note that the NFL exclusivity, which was the ENTIRE POINT OF THE LAWSUIT, remains exactly how it is. I can't find info on whether or not the settlement was accepted or rejected, though I imagine we'll hear about it one way or the other eventually.

LINK TO DETAILS (http://www.gamespot.com/news/ea-agrees-to-give-up-ncaa-football-exclusivity-6388207)

[Dobie]

B) EA has agreed to allow the NCAA license to go non-exclusive after their exclusive contract runs out in 2014... For five years. They are also prohibited from an exclusive license with... Arena Football for five years.

LINK TO DETAILS (http://www.gamespot.com/news/ea-agrees-to-give-up-ncaa-football-exclusivity-6388207)

Arena Football 2K15. Preorder now! :-/

Actually, could an arena football license open up the possibility of getting a Blitz-like game again? I think that league (if it still exists by then) would be a good fit for an arcade style football game.

[Greg2600]

EA would be valued at whatever the purchaser thinks their IP is worth. If they found the right sucker, who knows?

Exactly, it's all about IP, EA never designs games in house anymore.

[sloan]

Arena Football 2K15. Preorder now! :-/

Actually, could an arena football license open up the possibility of getting a Blitz-like game again? I think that league (if it still exists by then) would be a good fit for an arcade style football game.

Actually, a CFL game on any home console would get my dollars.

[Bojay1997]

My point is that for EA and other big publishers to stay competitive with console games in the age of mobile/social media games, they might need to scale back on the amount of games they release on a yearly basis. EA doesn't need to release sports games every year with minor tweaks and charge $60, the same goes for THQ with its WWE games. They should just focus their efforts on a handful of games at a time and make those games great. That was why I mentioned Naughty Dog, Team Kojima, etc. Yes their games follow the same formula overall, but nonetheless the games they produce like Uncharted and Metal Gear are the gold standard of the industry. They only get released every 2-4 years so you don't feel like you just played the game yesterday, as where the games that come out annually, you feel like you just played the same thing yesterday.

The problem with your point is that EA makes a ton of profit off of its sports titles and it costs very little in development terms to update them every year and yet they still sell millions of them. It's the rest of the EA properties that have high development costs and relatively low sales and the general overhead and bloat that comes with running a massive company that is dragging down the bottom line.

[Rickstilwell1]

Wait, EA was just going around buying up indie game developers just to sell them for a profit in other words? That's what it sounds like to me. Bulking up their IPs and teams just to get more money when they sell themselves. I wonder what really happened is if they already had plans to put themselves up for sale when they bought Popcap Games and such for this very reason?

[duffmanth]

The problem with your point is that EA makes a ton of profit off of its sports titles and it costs very little in development terms to update them every year and yet they still sell millions of them. It's the rest of the EA properties that have high development costs and relatively low sales and the general overhead and bloat that comes with running a massive company that is dragging down the bottom line.

Fair point, at the end of the day though, they still have too many games on the go. Maybe scaling back and focusing on certain titles will help them in the long term?