After a week of speculation and negotiation, it was finally announced that video game giant Electronic Arts (EA) has officially acquired the Seattle based, casual game publisher PopCap Games. This is a big deal for EA, as PopCap is the publisher of very popular games, such as: Plants vs. Zombies, Zuma, and Bejewled. PopCap currently has over 150 million users with games installed across multiple platforms such as: iPad, PC, Facebook and many more.
“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.”
Electronic Arts will pay approximately $650 million in cash and another $100 million in EA stock to PopCap in order to bring the company into the EA fold. There are also potentially lucrative performance incentives if PopCap’s game continue to do so well in the market. Not bad for a little company that started off leasing two games that they had developed to Microsoft for $3500 a month. PopCap had offered to sell Bejewled to Microsoft for $35,000 back in 1999 and MS had made offers to try and buy PopCap on the cheap. Microsoft obviously missed out. PopCap made keeping the company in Seattle part of this new agreement with EA. Likely true expansion rumors are already circulating about the company adding hundreds of new positions over the next three years.
“We picked EA because they have recast their culture around making great digital games,” said David Roberts, CEO of PopCap. “By working with EA, we’ll scale our games and services to deliver more social, mobile, casual fun to an even bigger, global audience.”
Electronic Arts has previously stated that it was through making large acquisitions after a previous deal for Playfish. PopCap had previously stated October as an IPO time-frame. Apparently this new deal was too sweet for either company to pass up. The video game and financial worlds both kept close eyes on this deal as Zynga, the maker of the Farmville and Empires and Allies games is set to go public soon. The EA/PopCap deal could hint about Zynga’s potential market value. At any rate, EA has certainly added a crown jewel to their roster in the ever-important casual gaming market. Best of luck PopCap.