Electronic Arts strikes again
Electronic Arts (EA), the King Kong of the electronic gaming industry, made yet another big buy this week, when it purchased VG Holdings, the parent of game making companies BioWare and Pandemic Studios. The deal was for $860 million, the largest one ever for EA.
Along with a number of current games (the best known title being Baldur's Gate and Star Wars Battlefront), the two companies have ten new titles in the pipeline, several of which, Mass Effect and Mercenaries 2: World in Flames, look like big hits. It is also developing a massively multiplayer online game (in the mold or World of Warfare). VG Holdings has been owned by a private equity group Elevation Partners (one of whose oweber is rocker Bono, by the way)..
The US market for video games is expected to exceed $10 billion this year. . By comparison, the box office for the US film industry was $9.2 billion gross last year. EA's share is of the gaming market is worth over $4 billion In fact, EA is larger than its top four competitors combined. But EA is not so strong in action-adventure and role-playing games (which make up over 35% of the US market), an area where BioWare and Pandemic are strong.
EA has steadily acquired other software companies. Just the week before, it acquired US-based Super Computer International, a company that makes tool for online interactive gaming. The terms were not disclosed. In recent years it has purchased:
- Jamdat Mobile, a maker of mobile games
- Slingshot Media, with software for online karaoke
- Phenomic Game Development, a maker of strategy games
- Mythic Enetertainment, a maker of strategy and role-playing games
