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.
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.
@bandarman No, the next things to happen is: EA buys Apple and Nintendo... that's the end of the world as we know it.
$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 $750 million? sheesh.
Now, we will get Plants V.S Zombies 2 on the apocalypse. DLC, DLC, More DLC, and outrageous prices. The first PvZ was 20 bucks on Steam and at my Frys (Yes, my Frys has a electronics section). Now it'll be about 40-50 dollars.
I'M TIRED OF MOST GAME THAT HAVE EA LOGO AT LOADING SCREEN NOW EA LOGO WILL COME FIRST BEFORE POPCAP LOGO IN THE NEXT PLANT VS ZOMBIE.
EA will destroy this company... they'll make DLC and MORE DLC that are worthless and then ruin franchises (dragon age 2).... oh well... I'll buy from other companies...
This sucks. Now every loading screen, menu, and play area will have a huge frekken (EA) logo on it. Not to forget that the games will now have multiple DLC packs that add back what the game should have been in the first place. PopCap, you suckers... smelled the money, took it, and now your products will turn to junk. I truly hope I'm wrong here.
@shamwownow212 and that will mean that video games have officially become pop music, and we can look forward to the death of actual games inexchange for pop cap and cod and farmville. yay...
@BenderUnit22 With that kind of money, they could have the Staples Center and renamed it the EA Center.
Hard to believe PopCap is worth that much. I could think of a lot of other companies i would have rather bought off for a billion dollars.
Surprising news, I guess it won't be fair to call Popcap "indie" anymore, although hopefully the financial backing of EA means we get more awesome games like Plants vs Zombies. Only time will tell.
DUUUUUUDDDDEEEE!!!!!!!!!! stupid little 99 cent game turns out to be a 750 million dollar company. I would sell the company and live like a king for the rest of my life, if I was popcap CEO.
Ea Shouldn't u be spending money on games that really matter to your fans? Like oh idkkk... NEED FOR SPEED?! the past NFS games have sucked. Bring us MOST WANTED 2 OR UNDERGROUND 3! I don't want plants vs zombies 2 where each plant will cost me a 1$ to plant!!!!!!
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.
You can see it now... Bejewelled 4... you can't move red blocks unless you have used the EA online pass.
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?
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.
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 :)
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.
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!!!
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
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.
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