EA Buys PopCap Games

EA is on a studio-buying spree. They not only just bought Unicorn Parade shop Ohai, a browser-game developer, for a “small sum”, they keep buying additional new casual game companies at an alarming rate!

In 2009 they picked up Playfish for $400 million (a social-gaming developer behind titles like Pet Society and Restaurant City), then they bought Angry Birds publisher Chillingo for $400 million; an iOS specialist who published Rovio’s Angry Birds and ZeptoLab’s Cut the Rope; also developed the Crystal software development kit, a helpful tool for Indie developers wanting to use microtransactions in their iOS or Flash games…

But now they’ve bought a “megaton”. EA has bought PopCap Games for what some are saying could be a $1 billion dollar deal, the deal at least exceeds $700 million!

And now to celebrate for PopCap, here’s an ubercute video of a Plants vs. Zombies song with “Zombies On Your Lawn” writer and singer, Laura Shigihara!

The deal has EA paying an unfathomable $650 million in cash, $100 million in shares to “certain stockholders of PopCap” and over $50 million in employee retention awards. And more that we surely don’t know of and that may come down the line. Such as extended and sizable “performance-related earn-outs”.

That means that if PopCap generates in excess of $343 million in revenue by 2013, EA has agreed to pay an additional $550 million. But dropping to $275 million if Popcap comes under $200 million in revenue. And if PopCap only makes $110 million, then EA only pays out an additional $100 million, with $91 million in revenure from PopCap resulting in no additional compensation.

“EA and PopCap are a compelling combination,” said EA CEO John Riccitiello. “PopCap’s great studio talent and powerful IP add to EA’s momentum and accelerate our drive towards a $1 billion digital business. EA’s global studio and publishing network will help PopCap rapidly expand their business to more digital devices, more countries, and more channels.”

PopCap of course is best known for Bejeweled, a game that lit the world on fire and has sold in excess of 50 million units. They’ve also had amazing hits with the likes of Peggle, Zuma and Plants vs Zombies.

Now that my brain hurts, lets switch gears to sadder news for older current-gen titles. EA announced that they will be switching off the online components for Army of Two (the first one on Xbox 360), Skate (360, PS3), Battlefield 2: Modern Combat (360), Tiger Woods PGA Tour 10 (360, PS3, Wii, PSP), Need for Speed: Most Wanted (360, PC), Need for Speed: Undercover (PSP), Medal of Honor: Airborne (PSP), Medal of Honor Heroes 2 (PSP, Wii), NASCAR 09 (360, PS3), NCAA Basketball 10 (360, PS3), NCAA Football 10 (360 PS3)and a numer of demos for said games. All of them will go offline on August 11th, 2011.

“The decisions to retire older EA games are never easy. The development teams and operational staff pour their hearts into these games almost as much as the customers playing them and it is hard to see one retired. But as games get replaced with newer titles, the number of players still enjoying the older games dwindles below a point — fewer than 1% of all peak online players across all EA titles — where it’s feasible to continue the behind-the-scenes work involved with keeping these games up and running.

We would rather our hard-working engineering and IT staff focus on keeping a positive experience for the other 99% of customers playing our more popular games. We hope you have gotten many hours of enjoyment out of the games and we appreciate your ongoing patronage.”

And in other publishers-buying-studio news, Ubisoft also purchased free-to-play developer Owlient, a Parisian studio specializing in the tween market with titles like Hawrse. This will only strengthen Ubisoft’s already-strong “Petz” line. Other teen online games Ubisoft picked up include Babydow and Fashiown, as well as nearly 2 million monthly active players.

A price wasn’t announced but Ubisoft expects to close on the deal during its second fiscal quarter.

Via GameSpot (2)