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Electronic Arts to Acquire PopCap Games

by James Jones - July 12, 2011, 2:54 pm EDT
Total comments: 12 Source: http://techcrunch.com/2011/07/12/confirmed-ea-buys..., TechCrunch

The deal will greatly increase EA's casual offerings.

Electronic Arts is buying PopCap Games, the developer of major casual successes such as Plants vs. Zombies and Bejeweled.

At a minimum, EA will pay $650 million in cash and $100 million in EA stock to PopCap. Based on PopCap's performance over the next two years, EA could pay another $550 million. If they earn over $343 million within that timeframe, EA will pay the entire amount, pushing the total for the deal to $1.3 billion. If PopCap fails to reach that threshold, the bonus payment is prorated unless the developer's income is less than $91 million, at which point EA will not have to pay any additional money beyond the initial $750 million. Last year, PopCap reported approximate revenue of $100 million.

PopCap has a strong presence in the worlds of mobile gaming, browser games, and Facebook applications. Beyond Plants vs. Zombies and Bejeweled the company has also produced the successful Bookworm series, Diner Dash, and Zuma, as well as card games and game show tie-ins.

Several of PopCap's games have come to Nintendo platforms, including Plants vs. Zombies (DS and DSiWare), Peggle: Dual Shot (DS), Bejeweled Twist (DS, DSiWare), Bejeweled 2 (WiiWare), Bookworm (DS, DSiWare), and more.

EA has been working to expand its casual and mobile gaming offerings. In 2007, they formed EA Casual Entertainment, which houses their casual offerings including the pogo.com, which offers subscription enhanced browser-based online games, including some of PopCap's. EA Casual Entertainment is also responsible for several Wii titles including Hasbro Family Game Night and Boom Blox.

Talkback

CericJuly 12, 2011

So important it was posted twice.  RIP PopCap games. It was good while it lasted.

I wonder who will fill the void once EA turns them into a husk.

TJ SpykeJuly 12, 2011

Ceric, EA has turned around as a company. They've made some very good games with their EA Mobile division (I love Scrabble for iPad, and they have done a good job with Playfish since buying them (over 55 million people play games from Playfish every month), there is no reason to believe they won't do a good job with PopCap.

ShyGuyJuly 12, 2011

Jeff Green goes back to working for EA. Watch out Hispanics!

CericJuly 12, 2011

Being cynical.  Just been through a lot of mergers lately where the good side got eviscerated by the bad side.  I just don't think they'll have the room to be quirky and flourish under EA.  Also concerned about talent leaving.  Could turn out ok but I don't expect to see much quirky new stuff coming out of PopCap anymore.  Which you hope EA would allow that but, they have to make their investment back in a timely fashion.  Back in the day I thought EA was a quality brand then went through  a bad time and haven't yet recovered.  Though does the mean I can has Bookworm Adventures for WiiU or something Haysworth like.

AVJuly 12, 2011

Will this mean games cost less or more?


More because EA is greedy
Less because EA doesn't need the game to be expensive where Popcap wanted to generate money
What about tie ins? Tiger Woods Bejeweled or Madden's Peggle .....

TJ SpykeJuly 12, 2011

I think some people still think of the old EA. They have pretty much left Playfish alone to do what they want, I think they will do the same here. At most, I expect the games to get more publicity due to EA's marketing power.

CericJuly 12, 2011

Quote from: TJ

I think some people still think of the old EA. They have pretty much left Playfish alone to do what they want, I think they will do the same here. At most, I expect the games to get more publicity due to EA's marketing power.

Honestly think Popcap is wider known then EA now.  (People know of their franchise but PopCap has a huge casual player base.)

TJ SpykeJuly 12, 2011

Whether they are wider known depends on the market IMO. Among casual gamers, I will agree. Even so, EA has more money to spend on marketing games than PopCap does, so they can help publicize games more.

CericJuly 12, 2011

Quote from: TJ

Whether they are wider known depends on the market IMO. Among casual gamers, I will agree. Even so, EA has more money to spend on marketing games than PopCap does, so they can help publicize games more.

EA definitely have more money.  Which I would hope could be used for experiments.

Killer_Man_JaroTom Malina, Associate Editor (Europe)July 13, 2011

Electronic Arts is going out on a limb. They are taking some real risks this year. This acquisition isn't quite on the same level as Microsoft buying Skype for many orders of magnitude above the current revenue of said company without much insight into their grand plan, but still... I hope this doesn't affect how PopCap is run too heavily.

Also, I heard something about EA's stock dropping 4% upon the announcement of this deal. Any confirmation of that?

CericJuly 13, 2011

Quote from: Killer_Man_Jaro

Electronic Arts is going out on a limb. They are taking some real risks this year. This acquisition isn't quite on the same level as Microsoft buying Skype for many orders of magnitude above the current revenue of said company without much insight into their grand plan, but still... I hope this doesn't affect how PopCap is run too heavily.

Also, I heard something about EA's stock dropping 4% upon the announcement of this deal. Any confirmation of that?

It dropped http://www.google.com/finance?client=ob&q=NASDAQ:ERTS
(It should be marker H which is covered by C when they made the announcement.)

Though the then rallied to more then the previous day but continued their downward trend.

CrimmJames Jones, Associate EditorJuly 13, 2011

Stock almost always drops when a company makes a major acquisition. Investors are always skittish of big moves.

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