Electronic Arts began the week with an associate of its Corporate Development Group saying that the company was “definitely” looking to acquire more game development studios in the future. EA is a company valued at around $5 billion today. Its tendrils spread far and wide through the industry. From big budget blockbusters like Mass Effect 3 to light hits like Bejeweled, it has games on every platform, from the lowly Nokia 1100 feature phone to the most powerful PC. Despite its big appetite for new studios, it looks like EA may be the one acquired in the near future. Nexon, the South Korean developer and publisher behind global hits like Maple Story, is said to be bidding on Electronic Arts.
Share prices in Electronic Arts spiked up 5% on Thursday morning after a South Korean newspaper said that Nexon had made an offer for the company. Nexon declined to comment on the rumor, as did EA’s spokesman Jeff Brown. Owen Mahoney though, Nexon’s chief financial officer, said that his company is actively hunting for mobile game developers strong in the smartphone space. Considering that EA consistently has multiple properties in the top ten best-seller lists in the Apple App Store and the Android Market, it would be a prime pick up for Nexon.
Whether EA and its board would acquiesce to a strong offer from Nexon is unknown. While EA has never managed to recover from its precipitous dip in value following the 2008 market crash, it remains one of the most valuable and highest earning video game publishers in the world.
Nexon for its part has grown dramatically over the past ten years thanks to the popularity of its online games throughout Asia. The aforementioned Maple Story and online racing game Kart Rider, in addition to numerous other MMOs, have made it a formidable competitor in the casual market.
That said it’s hard to imagine that Nexon has the available resources to outright purchase Electronic Arts. The company reported total assets of nearly 236 billion yen at the beginning of this year, close to $3 billion, or just over half of Electronic Arts’ market cap on the NASDAQ exchange.
Nexon’s strength in the Asian MMO market though could make it an attractive partner for Electronic Arts. A merger between the two could strengthen both companies in the global market.
Translation: Nexon could benefit from some of that sweet Madden NFL money here in the U.S. while Electronic Arts could get fat on the sweet goodness of Maple Story in South Korea.
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