It’s official! Electronic Arts (EA) has bought the Seattle based company PopCap for a whopping $1.3 billion dollars. The agreement states that EA will pay $650 million in cash and $100 million in shares of EA common stock. In addition, PopCap will be given an additional $550 million in bonuses if they hit certain money-making milestones in the next few years.
Many know EA as the gaming company for such popular games as ‘Dante’s Inferno’, ‘The Sims’, ‘Rock Band’, ’Mass Effect’ and the ‘Battlefield’ series. In their attempt to become a more dominant force in the gaming world, they have ventured into PopCap’s casual gaming circle to expand their reach into the digital gaming genre.
This is not the first time PopCap has been wooed by a big company. In 1999, they tried to sell ‘Bejeweled’
to Microsoft for $35,000 but instead, Microsoft countered with a $1,500 license option. The offer was turned down by PopCap (which was smart move on their part) and now ‘Bejeweled’ makes up 40% of the million dollar annual revenue for the company, selling a game every 4.3 seconds.
PopCap offers games you can buy in the stores, but many of them are in a digital format for smart phones, PC’s, and game consoles. Many are featured on Facebook and sport such popular titles as ‘Bejeweled’, ‘Zuma’s Revenge’ and ‘Plants vs. Zombies’. Eighty percent of PopCap’s revenue comes from the digital platforms often downloaded by the casual gamer making this purchase something to fill the void that EA is currently lacking in.
Obviously, with this price, EA truly wanted PopCap. This is a win-win for both companies as PopCap now will be able to expand their business into more areas not afforded to them before and EA now has the means to become a fully integrated digital gaming company. Either way, this move reflects the extent of what EA will do to become a foremost power in the gaming world.