EA Nabs BioWare, Pandemic Studios
As our dear Asterick lamented/noted earlier, publishing powerhouse EA has purchased BioWare and Pandemic Studios for a fine piece of cash: $860 million. BioWare and Pandemic are both part of a "superdeveloper" called VG Holding Corp funded by a VC firm with freaking Bono on its board - which isn't terribly relevant, but come on: Bono.
When it was formed in 2005, the VG Holding Corp deal represented more than $300 million - this week, EA made that investment a good one by paying nearly triple that amount - including $620 million in cash to the VG stockholders.
As a result, of course, EA will now own both studios' properties, not the least of which is the forthcoming Mass Effect, which BioWare still holds will be the first game in a trilogy.
Cutting aside the financial details and feelings about large publishers, this seems to me to be a story about the life-cycle of the independent studio: BioWare roared onto the scene with Baldur's Gate a million years ago, put out amazing but increasingly rote RPGs, and has now been acquired by a megapublisher. Why does this make Asterick and others sad? Well, it doesn't say "Irrational Games" on Ken Levine's desk anymore, it says "2K Boston." I'm not making any predictions about BioWare or the quality of its games from here on out - EA publishes some amazing games. But they also push out a lot of franchise and sequel games that don't exactly have the shine of unmolested artistic integrity.
For Bono and friends, this looks like a sweet deal. Methinks the rest of us will have to wait and see.
EA To Acquire BioWare Corp. and Pandemic Studios
Leaders in RPG, Action and Adventure Genres; Ten Franchises in Development - Six Wholly Owned
REDWOOD CITY, Calif.--(BUSINESS WIRE)--Electronic Arts Inc. (NASDAQ:ERTS) today announced an agreement with Elevation Partners to acquire VG Holding Corp. -- the owner of both BioWare Corp. and Pandemic Studios. This acquisition gives EA a strong competitive position in key genres in interactive entertainment: action, adventure and role-playing games. The two studios have been recognized for creating some of the highest-quality games in the industry.
BioWare Corp. and Pandemic Studios have ten franchises under development, including six wholly owned games. BioWare Corp. is currently developing the highly anticipated Mass Effect, which will be published by Microsoft in November, and is in the early development stages of a massively multiplayer online game. Pandemic Studios is redefining open-world games with its upcoming Mercenaries 2: World in Flames™ and Saboteur™, in addition to several unannounced projects.
Pandemic Studios and BioWare Corp. employ roughly 800 people across four studios located in Edmonton, Canada; Los Angeles; Austin; and Brisbane, Australia.
“These are two of the most respected studios in the industry and I’m glad to be working with them again. They’ll make a strong contribution to our strategic growth initiatives on quality, online gaming and developing new intellectual properties,” said John Riccitiello, EA’s Chief Executive Officer. “We also expect this will drive long-term value for our shareholders.”
Pandemic Studios is led by Andrew Goldman, Josh Resnick and Greg Borrud. BioWare Corp. is jointly led by Greg Zeschuk and Ray Muzyka. These teams will join the EA™ Games Label run by Frank Gibeau, President of EA Games.
“Pandemic Studios remains focused on attracting the best talent and creating blockbuster action games,” said Josh Resnick, President and Co-founder of Pandemic Studios. “As a worldwide publishing leader, EA represents the ideal partner to bring our titles to market as global entertainment events.”
“We are truly excited by John Riccitiello’s new vision for EA,” said Ray Muzyka, Co-founder and CEO of BioWare Corp. “This vision is consistent with BioWare’s focus on crafting the highest quality story-driven games in the world. It will enable us to further the careers of the passionate, creative and hard working teams at BioWare Edmonton and BioWare Austin.”
EA will pay up to $620 million in cash to the stockholders of VG Holding Corp. and will issue up to an additional $155 million in equity to certain employees of VG Holding Corp., which will be subject to time-based or performance-based vesting criteria. EA will also assume outstanding VG Holding Corp. stock options. In addition, EA has agreed to lend VG Holding Corp. up to $35 million through the closing of the acquisition.
Transaction and Financial Information
* The acquisition is subject to customary closing conditions, including regulatory approvals.
* The transaction is expected to close in January 2008.
* On a GAAP basis, the acquisition is expected to be dilutive to EA’s fiscal 2008 results by approximately $0.30 to $0.40 due to non-recurring acquisition-related charges, stock-based compensation and amortization of intangible assets. This amount is a preliminary estimate based on currently-available information and is subject to change.
* On a non-GAAP basis, the acquisition is expected to be dilutive to EA’s fiscal 2008 fourth quarter results by approximately $0.05. This amount is a preliminary estimate based on currently-available information and is subject to change.
Acquisition Conference Call
Electronic Arts will host a conference call today at 2:00 pm Pacific Time / 5:00 pm Eastern Time to discuss the transaction. During the course of the call, Electronic Arts may also disclose material developments affecting its business and/or financial performance. Listeners may access the conference call live through a dial-in number at (877) 856-1956, access code 220497, or via webcast at http://investor.ea.com.
A dial-in replay of the conference call will be provided until October 18, 2007 at (719) 457-0820, access code 220497. A webcast archive of the conference call will be available for one year at http://investor.ea.com.
Second Quarter Conference Call
Electronic Arts Inc. will release its results for the second quarter of fiscal year 2008 after the close of market on Thursday, November 1, 2007. In conjunction with this release, Electronic Arts will host a conference call at 2:00 pm Pacific Time / 5:00 pm Eastern Time to review its results for the second fiscal quarter, discuss its outlook for the future, and may disclose other material developments affecting its business and/or financial performance. Listeners may access the conference call live through a dial-in number at (877) 723-9518, access code 220497, or via webcast at http://investor.ea.com.
A dial-in replay of the conference call will be provided until November 8, 2007 at (719) 457-0820, access code 220497. A webcast archive of the conference call will be available for one year at http://investor.ea.com.
About Electronic Arts
Electronic Arts Inc. (EA), headquartered in Redwood City, California, is the world's leading interactive entertainment software company. Founded in 1982, the company develops, publishes, and distributes interactive software worldwide for video game systems, personal computers, cellular handsets and the Internet. Electronic Arts markets its products under four brand names: EA SPORTSTM, EATM, EA SPORTS BIGTM and POGOTM. In fiscal 2007, EA posted revenue of $3.09 billion and had 24 titles that sold more than one million copies. EA's homepage and online game site is www.ea.com. More information about EA's products and full text of press releases can be found on the Internet at http://info.ea.com.
EA, EA SPORTS, EA SPORTS BIG and POGO are trademarks or registered trademarks of Electronic Arts Inc. in the U.S. and/or other countries. ™, ®, and Nintendo DS are trademarks of Nintendo.
tiny dancer
Posted to Hot Stuff, Miscellany on 12 October 2007
· Comments (2)
Other stuff like this: acquisition, bioware, ea, mass effect, pandemic, vg holding corp
So you don't like Bono, big deal. (I do) What I wanna know is why all the parties involved are acting like its a matter of national security. Aren't mergers and the resulting products supposed to be more transparent?
It's obviously the slow death of Bioware, and everybody knows it. Everything that EA touches has been consumed and slowly destroyed until nothing remains but once-promising IP's locked up in an EA corporate vault to wither away.
They'll never work on another new game again. The only games we'll ever see out from Bioware will be reiterations of existing properties. With the exception of the Bioware MMO of course. But EA will probably cancel that because they already own Mythic, and who wants to compete with themselves?
Mythic has more lead-time and experience in building MMO's, so they'll probably survive while Bioware will be relegated to producing console crap versions of their past games and sequels.