Electronic Arts to Buy PopCap Games for up to $1.3 Billion
Electronic Arts has announced that they are buying PopCap Games in a deal worth up to $1.3 billion as it tries to ramp up its social and casual games portfolio and better compete with Zynga Inc. As part of the deal, EA said it will pay about $650 million in cash and $100 million in common stock upfront for the maker of the popular video games “Bejeweled” and “Plants vs. Zombies.” EA could pay up to an additional $550 million if PopCap reaches certain performance targets in about two years. If you recall in June, EA launched Origin, a direct-to-consumer game-delivery platform, in the hopes of growing that digital revenue even more. The company made 150 games available at launch that users could purchase and download to their PCs. EA said at the time that Origin would be a go-to spot for mobile games, as well. EA’s PopCap acquisition is scheduled to close in August, pending regulatory approval.
EA is investing more in digital content as customers are buying fewer games on discs to play on consoles. Video game companies are now offering users options to play free or low-priced games on mobile devices, PCs and Facebook. EA’s Chief Financial Officer Eric Brown said the deal would help EA better compete with Zynga. Zynga filed with regulators on July 1 for an initial public offering of up to $1 billion. “This gives us a much stronger presence in social network games,” Brown said.
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