Electronic Arts will buy PopCap Games
Source: Agencies |
July 14, 2011, Thursday
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Print Edition
Print Edition
ELECTRONIC Arts Inc said on Tuesday it will buy PopCap Games for at least US$750 million in a bid to snag a larger piece of the rapidly growing market for games on cell phones and social networks.
The video game publisher also said its fiscal first-quarter results will be better than it anticipated but issued a second-quarter forecast below analyst estimates, saying expenses from the purchase will weigh down its results for the July-September period. Its shares fell more than 3 percent in extended trading.
Redwood City-based EA will pay PopCap US$650 million in cash and US$100 million in common shares. PopCap, which makes the popular "Bejeweled" series and "Plants vs. Zombies" games, will get up to US$550 million more if it reaches certain financial milestones.
EA plans to offer PopCap employees US$50 million more during the next four years in order to entice them to stay, too. The deal is expected to be completed in August.
If all the payouts are made, it would be EA's largest acquisition to date.
PopCap will be the latest addition to EA's digital business, which includes games on Facebook, the iPhone and other gadgets, as well as downloadable add-on content for games sold on discs.
EA is building up this side of its business as consumers increasingly play games on smartphones, tablet computers and Facebook, and grow less interested in expensive, packaged video games.
EA CEO John Riccitiello said a quarter of video games are now played on mobile devices and social networks - a figure he expects to climb to 50 percent in the next five years.
"PopCap is a leader on all of those platforms," Riccitiello said.
PopCap CEO David Roberts said the company had been mulling a public offering of its stock, and was also approached by multiple companies interested in buying it.
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