Electronic Arts, Activision Blizzard, and Ubisoft are the biggest video game publishers in the world by revenue excluding platform holders like Nintendo, Sony, and Microsoft. Of the big three though, Electronic Arts is perhaps the most ravenous, acquiring independent game development studios at an impressive pace. EA simply gobbles up what it needs to survive. It doesn’t plan to stop any time soon.
According to a Monday post on Electronic Arts blog The Beat, more acquisitions are on the horizon. Carolyn Rhode, an associate in EA’s Corporate Development group in charge of mergers and acquisitions, said that the company is “definitely” on the look out for other companies that are for sale. “If we’re interested in moving into a particular genre of gaming, or bolstering our presence in a certain area, then we’ll look at the market landscape to see who’s performing the best and who, of those companies, is a good strategic and financial fit for EA.”
Put another way: Whatever we need, we buy who’s good at it. It’s a strategy that has worked for EA for years. Its 2007 acquisition of Elevation Partners that gave it control of BioWare for example gave EA an impressive foothold in the role-playing market. A more recent example is EA’s 2011 acquisition of Bejeweled creator PopCap games. PopCap was poised to become a publicly traded company at the end of 2011, but EA saw a golden opportunity to further establish its dominant place in the booming casual market on mobile devices and PCs.
The question then is: If Carolyn Rhode and the rest of EA’s Corporate Development team are on the hunt, who might they be sniffing after?
It’s possible that EA will try to further entrench itself in the big budget market considering it’s already invested heavily in the casual space in the past twelve months. Even after it made an impressive recovery during its recent financial quarter, publisher THQ remains vulnerable and could be an affordable pick up for EA. The company has a market value of just under $50 million, small potatoes for Electronic Arts, and potentially worthwhile for the stockpile of intellectual properties like Darksiders and Homefront. It would also allow EA to gain even more control of the sports video games market provided the acquisition led to EA taking over the WWE and UFC license rights.
Then again, it’s possible that EA simply isn’t concerned with the big budget game market anymore. Perennial sellers like Madden NFL, The Sims, and military games like Battlefield are all EA really needs to stay strong in that space.
If you want to know who EA will buy up next, look to the App Store, Steam, and other digital platforms for up and coming independent studios finding success with smaller titles. They will be EA’s foundation for a future in the industry.
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