EA wants to sell or merge

The video game market is consolidating like never before and Electronic Arts is scrambling just like everyone else. The Battlefield and FIFA maker recently pursued a merger with NBCUniversal and has also had potential acquisition talks with Disney, Apple and other companies, according to a new report from puck† While no deal is currently in the works, it doesn’t sound like EA plans to give up anytime soon.

“In recent years, as media companies have become more interested in the burgeoning game industry, Wilson and Electronic Arts have held conversations with a number of different potential candidates, including Disney, Apple, and Amazon, sources with knowledge of those conversations told me,” wrote puck‘s veteran media reporter, Dylan Beyers. “Several sources familiar with these talks say EA has been persistent in pursuing a sale, and has only become more emboldened in the wake of the Microsoft Activision deal. Others say EA is particularly interested in a merger agreement that would allow Wilson to remain as chief executive of the combined company.”

But it was apparently a deal with NBCUniversal that went the furthest. According to Beyers, Comcast CEO Brian Roberts wanted to split the entertainment conglomerate into a separate entity with EA, with one version of the deal putting current EA CEO Andrew Wilson in charge of the new mega-business. However, negotiations eventually broke down over the price.

*thin-thin*

“We do not comment on rumors and speculation regarding mergers and acquisitions,” said EA spokesman John Reseburg. my box in a statement. “We are proud to operate from a position of strength and growth, with a portfolio of great games built around powerful IP, created by incredibly talented teams and a network of more than half a billion players. We see a very bright future ahead.”

Read more: Private Equity sees Ubisoft as the next big gaming acquisition

The past year has seen a frenzy of video game studio acquisitions, one that gained momentum in January after Grand Theft Auto publisher Take-Two announced it would buy Zynga for $12.7 ($18) billion and Microsoft announced it plans to buy Duty maker Activision Blizzard for $69 ($96) billion. Sony followed weeks later with a deal to buy the studio behind Lot 2Bungie, at $3.6 billion dollars, a price some analysts viewed as massively inflated and possibly a sign of another frenzied rush to consolidate among the game industry’s biggest players.

In an earnings call in February, Andrew Wilson suggested the company was focused on making acquisitions rather than being acquired. As proof, EA spent $US5 ($7) billion in the past year buying up studios to increase its size. But now it looks like the publisher is aggressively looking for other ways to scale. Beyers reports that Wilson only approached Disney in March “in pursuit of what sources described as ‘a more meaningful relationship’ than licensing agreements.”

This news comes as EA has lost or abandoned some of its largest existing licensing deals. While the publisher recently released three new Star Wars games currently in production, including a new one Star Wars Jedi: Fallen Order rumored to be released in early 2023, the exclusive agreement with Disney for the Star Wars license will not renew when it expires in 2023. That allows competitors like Quantic Dream and Ubisoft to build their own big Star Wars projects. EA also revealed last week that it is ending its similar 10-year exclusivity deal with FIFA, and will be renaming its blockbuster football franchise as of 2023. EA Sports FC

Whatever the future holds for EA, a big concern with consolidation is how it will ultimately affect the employees at these companies. Even as EA reported another profitable year, my box recently learned that an estimated 200 customer service employees are being laid off. According to four of the affected employees, their work is outsourced to cheaper third-party suppliers in Romania and India.

Comcast, Disney and Apple did not immediately respond to a request for comment.

Leave a Comment