EA buys PopCap for $750 million+

Publisher expects to close on Bejeweled, Peggle maker next month, possible $550 million more in bonuses; Q1, FY financial guidance updated.

Rumors flew in late June that Electronic Arts was in late-stage discussions to acquire casual gaming stalwart PopCap Games for an eyebrow-raising $1 billion. As it would turn out, those rumors weren't far off.

PopCap is worth a heap of diamonds.

Today, EA announced plans to purchase PopCap for $650 million in cash. The deal, which is expected to close by the end of August, also sees EA paying out $100 million in shares to "certain stockholders of PopCap." EA also intends to offer some $50 million in employee retention awards.

Additionally, PopCap has been extended a sizable performance-related earn-out that could potentially increase the purchase price. Should PopCap generate in excess of $343 million in revenue by the end of 2013, EA will pay out an additional $550 million. If PopCap's earnings come in at $200 million, that payout would drop to $275 million, while $110 million in revenue would yield $100 million. Anything less than $91 million would result 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 is perhaps best known for its Bejeweled franchise, which has sold more than 50 million units since first release in 2000. The most recent installment, Bejeweled 3, arrived for the PC in December and is expected to hit other platforms later this year. The Washington-based studio has also found success with such franchises as Peggle, Zuma, and Plants vs. Zombies.

Beyond trumpeting its deal with PopCap, EA also preannounced its first-quarter earnings for the April-June quarter. Net revenue for the quarter ended June 30 came in between $975 million to $1 billion, beating company guidance of $900 million to $950 million. EA also said that diluted earnings per share will come in between $0.63 to $0.66 versus guidance of $0.44 to $0.53.

EA also raised its full-year guidance for the earnings period ending March 31, 2012. The publisher now expects to bring in $3.725 billion to $3.95 billion as compared to previous guidance of $3.7 billion to $3.9 billion. However, diluted earnings per share was revised down to a range of -$0.04 to +$0.26.

PopCap is the latest in EA's social- and casual-gaming buying spree. In November 2009, the company scooped up Facebook game publisher Playfish in a deal worth up to $400 million. Then, in October 2010, it netted Angry Birds publisher Chillingo for $20 million. Reports also emerged today that EA had acquired Ohai for a small sum.

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Discussion

254 comments
MrJoltz
MrJoltz

Just like Westwood...

grbolivar
grbolivar

@bandarman No, the next things to happen is: EA buys Apple and Nintendo... that's the end of the world as we know it.

KimCheeWarriorX
KimCheeWarriorX

$750 million? really? is popcap really worth that much? either ea must know something about popcap that some of us dont or ea's just looking for something to blow their money on. i dont deny that popcap's made some fun stuff but is their success really worth $750 million? sheesh.

bandarman
bandarman

The next thing that we would hear is Apple buys EA. 'Tis the end of all!

grbolivar
grbolivar

EAs own favorite game: Command & Conquer... as many companies as we can!

Philly1UPer
Philly1UPer

I got really worried because I thought the title said "EA buys Pop Tarts"

Shadowblade2584
Shadowblade2584

Now, we will get Plants V.S Zombies 2 on the apocalypse. DLC, DLC, More DLC, and outrageous prices. The first PvZ was 20 bucks on Steam and at my Frys (Yes, my Frys has a electronics section). Now it'll be about 40-50 dollars.

dinslacck
dinslacck

I'M TIRED OF MOST GAME THAT HAVE EA LOGO AT LOADING SCREEN NOW EA LOGO WILL COME FIRST BEFORE POPCAP LOGO IN THE NEXT PLANT VS ZOMBIE.

ScapeXxX
ScapeXxX

Bejeweled Effect will be release on Q4 Lol..

Davi11111111111
Davi11111111111

EA will destroy this company... they'll make DLC and MORE DLC that are worthless and then ruin franchises (dragon age 2).... oh well... I'll buy from other companies...

xKamuiSx
xKamuiSx

my mother will be sad ;P

xKamuiSx
xKamuiSx

[This message was deleted at the request of the original poster]

XaineBD
XaineBD

This sucks. Now every loading screen, menu, and play area will have a huge frekken (EA) logo on it. Not to forget that the games will now have multiple DLC packs that add back what the game should have been in the first place. PopCap, you suckers... smelled the money, took it, and now your products will turn to junk. I truly hope I'm wrong here.

tenz01
tenz01

and the monopoly continues..

wedran123
wedran123

EA world domination plan....step 2: F*** over double fine so Psychonauts 2 is NEVER made

3116porter
3116porter

and there goes another great franchise

HaloPimp978
HaloPimp978

WHAT A LOAD OF CRAP! this is horrible i love Popcap games and now EA is taking over?! WTF!

da_chub
da_chub

@shamwownow212 and that will mean that video games have officially become pop music, and we can look forward to the death of actual games inexchange for pop cap and cod and farmville. yay...

Shamwownow212
Shamwownow212

EA may one day take over the whole videogame industry :o

mtait01
mtait01

more onlines passes!!! YAY!!!

J4m3sR4n0r72
J4m3sR4n0r72

@BenderUnit22 With that kind of money, they could have the Staples Center and renamed it the EA Center.

adidas32x
adidas32x

[This message was deleted at the request of a moderator or administrator]

voldalin
voldalin

Hard to believe PopCap is worth that much. I could think of a lot of other companies i would have rather bought off for a billion dollars.

loopy_101
loopy_101

Surprising news, I guess it won't be fair to call Popcap "indie" anymore, although hopefully the financial backing of EA means we get more awesome games like Plants vs Zombies. Only time will tell.

ebookerd1
ebookerd1

Good Job Pop Cap way to get all your employees laid off in 2 years..... (SAD but true)

InfestedHunter
InfestedHunter

DUUUUUUDDDDEEEE!!!!!!!!!! stupid little 99 cent game turns out to be a 750 million dollar company. I would sell the company and live like a king for the rest of my life, if I was popcap CEO.

icybl00d3d
icybl00d3d

Ea Shouldn't u be spending money on games that really matter to your fans? Like oh idkkk... NEED FOR SPEED?! the past NFS games have sucked. Bring us MOST WANTED 2 OR UNDERGROUND 3! I don't want plants vs zombies 2 where each plant will cost me a 1$ to plant!!!!!!

DirtyAl
DirtyAl

So for madden 2012, you can place one of the many different colored jewels in Ladainian Tomlinson's ear while he's on the sideline instead of having coaches walking back and forth or any other sideline activity for that matter.

TTDog
TTDog

You can see it now... Bejewelled 4... you can't move red blocks unless you have used the EA online pass.

Trunammer
Trunammer

The death of PopCap =( DLCs galore =o

kittygus
kittygus

EA just got some new franchises to milk.

Jaga_Telesin
Jaga_Telesin

Say goodbye to these games as you know them. EA's kiss of death will seal their future.

atopp399
atopp399

So long fun cheap games. Now they will be the most expensive on the market. Glad I picked up Plants vs Zombies when it was free on Amazon. I wonder what the return on investment period is for this purchase?

ThAdEa82
ThAdEa82

@lifemeister - its runaway capitalism at its finest.

noah364
noah364

I hope that they come out with more Plants vs. Zombies. That game rules! anyone who has not played it should buy it now. BUYITBUYITBUYITBUYITBUYITBUYITBUYIT! No, really, it is fun.

OtherFabbros
OtherFabbros

Casual games domains the world, bwahahahahaha!

lowkey254
lowkey254

EA is all over the place. That's not necessarily a good thing though.

pokecharm
pokecharm

retention awards? I want a retention award! why does this remind me of that episode of Spongebob: Big Pink Loser where Patrick spends the whole episode trying to win an award...wow, I just zone in and out while I'm typing/reading :)

hector1313
hector1313

Oh joy, another company joins the EA family. Maybe they'll actually make decent games from the newly acquired IPs this time? I doubt it, though.

Tzunoy
Tzunoy

Eliminate all the concurrence and make them pay you this is the Idea. It leaves no choice and you must buy from who has them anyway. Guess who's making money? Ha!!!

GSuser10
GSuser10

Oh great..now EA is trying to take over on this business but I'm tossed since EA is taking over..will this be a good thing or a bad thing in the end? Eh more likely a bad thing

redness19
redness19

As people have in all seriousness joked, you can expect to see 99 cent DLC for PopCap games. EA is a corporation and this is obligated to their shareholders to make the most amount of money possible, quality is irrelevant, profit is everything. This is why EA (and Activision) are poison to the gaming world. Quality means nothing when shipping it 3 months early will make for a better quarterly review. Support great independent studios like CDPR and Rocksteady, these kinds of studios are keeping the industry alive.