EA buying BioWare/Pandemic for $860M

[UPDATE] Superdeveloper scooped up by megapublisher for a staggering sum, deal to close in January; deal covers 10 IPs, including Mass Effect, Mercenaries, and unnamed Wii and DS games.

1399 Comments

A week jam-packed with Nintendo news was overshadowed today by an announcement that sent shockwaves through the North American game industry. Thursday afternoon, top publisher Electronic Arts announced that it will acquire VG Holding Corp., owner of BioWare/Pandemic.

VG Holding Corp. was formed in late 2005 when esteemed Canadian role-playing game studio BioWare formed the aforementioned "superdeveloper" with Californian shop Pandemic Studios. The union was funded by Elevation Partners, a venture capital firm with rock star Bono on its board, and brokered by then-Elevation board member John Riccitiello, who became BioWare/Pandemic's CEO.

At the time, the deal was seen as a break from the traditional developer-publisher relationship, which sees the former beholden to the latter for funding. However, when Riccitiello returned to his old job as EA CEO, many wondered if the move might presage a takeover bid of BioWare/Pandemic. These suspicions were further raised when EA agreed to distribute the Pandemic shooter Mercenaries 2: World in Flames under its EA Partners program.

When the BioWare/Pandemic deal was announced, Elevation made much of the fact the union represented a "combined investment" of more than $300 million, including future funding. Today, the company got a massive return on said investment, with EA paying $620 million in cash to the stockholders of VG Holding Corp. In addition, the publisher will issue an additional $155 million in equity to unidentified VG Holding employees, as well as assume $50 million in outstanding VG stock options, and will lend VG $35 million to fund the transition.

In return for paying a princely sum, EA becomes the owner of both BioWare's and Pandemic's original properties. Jade Empire, Mass Effect, and Dragon Age are among BioWare's original IP, which does not include such licensed hits as the Dungeons and Dragons-based Neverwinter Nights, Star Wars: Knights of the Old Republic, or the DS Sonic RPG. BioWare is also working on an unnamed massively multiplayer online role-playing game. Pandemic is best known for the Full Spectrum Warrior and Mercenaries series, as well as the THQ-owned Destroy All Humans! and LucasArts-owned Star Wars: Battlefront franchises.

However, EA was relatively cagey about which BioWare/Pandemic games will become EA properties. The announcement only mentioned one BioWare (Mass Effect) and two Pandemic games (Saboteur, Mercenaries) by name. However, it did say the two studios have "10 franchises under development, including six wholly owned games."

Pending regulatory approval, EA's takeover of BioWare/Pandemic will be final on January 2008. Both studios will become part of the EA Games division, run by Frank Gibeau, with Greg Zeschuk and Ray Muzyka continuing to run BioWare, and Andrew Goldman, Josh Resnick, and Greg Borrud staying in charge of Pandemic. The two studios employ 800 people in Los Angeles; Austin; Edmonton; and Brisbane, Australia.

[UPDATE] In a conference call with analysts after the announcement, EA executives shed some light on the motivation behind the deal. Besides the impeccable pedigree of both studios, Riccitiello said that the "acquisition fills out a gap in [EA's] genre lineup," specifically the role-playing and action adventure markets. The executive also cited BioWare's forthcoming MMORPG as a huge opportunity for "further expansion into the MMO space."

Although the implication is that the BioWare MMORPG is an original IP, Riccitiello and his associates steered clear of saying so specifically. He did say that the deal will make EA the owner of the Mass Effect, Jade Empire, Mercenaries, Full Spectrum Warrior, and Saboteur properties. The executive also said that EA "expect[s] to bring 10 franchises to market in the next few years; six of which are wholly owned." [UPDATE 2] No mention was made of Dragon Age but BioWare reps confirmed with GameSpot that the little-seen title is moving forward in development, and is already in playable form.

Later, Gibeau said that number includes "many titles that have not yet been announced that we will be announcing in the near future." These include "several unannounced titles that are targeted both at the Wii and DS." The two studios' combined operations are expected to yield around four or five games each year for the next three fiscal years.

On the financial side, EA CFO Warren Jenson said that that he expects games from the two studios to generate over $300 million in annual income during EA's 2009 and 2010 fiscal years. (EA's 2009 fiscal year begins on April 1, 2008.) He later said that number would increase once the BioWare MMORPG launches "in the back half" of that period.

For more on the EA-BioWare/Pandemic deal, read GameSpot's interview with BioWare co-CEOs Greg Zeschuk and Ray Muzyka.

Got a news tip or want to contact us directly? Email news@gamespot.com

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Avatar image for GoFeR24
GoFeR24

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EA + BioWare = Apocalypse :(

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ebookerd1

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Business Men know how to take money and cut corners. Too many corners have been cut in making games. Games are an art that we enjoy. I wouldn't buy a lousy painting for my house, so why would I buy a lousy game for my enjoyment. business and art rarely go hand-in-hand. I hope these cut throats realize that there money will drop if they keep handing out crap and stop pocketing all the Dev Cash.

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deshields538

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"westwood seem to have some autonomy" Feel free not to talk crap. Westwood was destroyed after EA combined it with EA Pacific to form EA LA. And some of the developers left and made Petroglyph so EA LA is nothing like Westwood.

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etchus

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i hope bioware stay autonomous even if they're with EA already..maxis and westwood seem to have some autonomy

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deshields538

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First Westwood, now this! :cry: At the rate they're going, EA will achieve nuclear capability by 2020. :(

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saigondude63

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holy cats......................and stuff

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Ravenlore_basic

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NOW coming to PS3: MASS EFFECT, JADE EMPIRE..... so all is not bad :^)

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doctorteeth

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I really hate EA. Oh, and Microsoft. When money does the talking instead of developers, gamers lose.

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Vash67

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I actually like this. Now BioWare and Pandemic have an inifinite supply of moolah to make their games with! I just hope that they still have control over what they do. I don't want needless sequels just because EA needs to fill genre gaps in their schedule. Make Mercenaries 3 when it makes sense, not just next year!

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goldeneye_basic

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NOOOOOOOOOOOOOOOOO!!!!!!!!!!!!!!!!!!!!!!! Well at least Mass Effect is almost done and won't stink of EA.

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Frags-o-Plenty

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If you hear a loud, anguished, pained, tormented and generally p***ed off sound in your local area, you're probably one of my neighbors. Come by and say hi so we can be angry about this together.

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creep93

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Crap.

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lowkey254

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It's all about business. The business men are all about the money and they know how to get it. Hopefully they will allow bio-ware/pandemic to have an autonomous mind.

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sirus1210

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EA is a giant monster that is slowly becomming smarter ... comparing them to how they USED to be not too long ago with how they are now is like comparing apples and oranges. They are really a smart company now. Sure they pump out often mediocre titles that flub on reviews, but they still make fun games that people play. This move is smarter than a lot of people will give them credit for and not something I could see them doing years ago around the time they cornered the NFL market like a bunch of goons. Long live NFL2K! Either way ... EA is growing smarter by the year. Joke now about their large size and corporate attitude about making games, but the bottom line is you'll still buy their games because they don't often get 0.5s.

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edhc44

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Just as long as Mass Effect stays as it is...

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NandoSupes

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why???? why Bioware sold their souls to the Devil? lol!!!,EA only cares about making tons of cash,I mean all publishers do,but EA is the worst not because they are the biggest,but because they rarely produce a AAA title,if Bioware has the freedom to produce their games without having EA down their throats rushing them,then fine. otherwise this is not a good move by Bioware.I'm sorry but EA is just not the best publisher. I don't care how much money you have,is all about giving the developers the time to create a great game.

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abadgirl84

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bye bye Bioware!thx for bg2 and nwn.....

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josephmadde2005

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WOW look for employees to leave and start their own company

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deactivated-5a57a91753251

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This is bad news, thanks for the good times bioware!!!! At least we will get to see one mass effect game as bioware intended, but after that it don't look good. Only time will tell what will happen to bioware but it doesn't look like many people look on this move kindly. Its gonna suck seeing that EA logo flash up when you load up future bioware games!!!!!!!!!!!!!!!! F*** off EA!!!!

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Codgin

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Everyone should wait to see how this effects the Bioware and Pandemic games, before they drop the bombshell on EA

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ElvenArcher3000

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Sad to see that another developer falls under the evil carpet of EA.

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ao_bomber

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RIP BioWare/Pandemic.

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Revan2

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NOOOOOOOOOOOOOOOOOOOOOOOOO! EA is gonna ruin Mass Effect 2 and 3, they make everything suck! especially if they put there own knowledge into making the game, BioWare know what they are doing they don't need EA's Cr*ppy advice!

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YukoAsho

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StealSniper - I agree, this is an amazing move for EA. While the company makes great action, sports and racing games, they're not exactly an RPG powerhouse. BioWare fills an important gap in the company's portfolio.

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YukoAsho

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batosaims - Obviously Mass Effect will be an MS exclusive because they're publishing the game this November, and this buyout doesn't go into effect until January, when regulatory bodies have signed off. However, barring any FTC objections, when BioWare is in the EA fold, Mass Effect will be an EA property, and they can do whatever the hell they like with it.

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morrow4

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F*** THAT!!!!!! there goes star wars.

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ZURICH2006

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NOOOOOOOOOOOOOOOOOOOOOOOO!

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Erebus

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EA to become a video game monolopy by 2011, when they buy Blizzard for 2.6 billion dollars.

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batosaims

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why are sony fans so stupid mass effect will remain on the 360 exclusive because ms owns the publishing rights u imbeciles sorry but the last good bioware game will remain a 360 exclusive too bad sony wonth ave a decent game until 2010 and they will never know the joy of a good bioware game

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surppo

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how can yall be mad nobody really knows whats gonna happen can yall at least wait until they start crappin out games before hatin on ea. besides if they bring mass effect to the ps3 i ll be happy if not i dont care

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gamefreac

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This is VERY bad news.......I can't stand EA, they don't want ANY competition Next: EA buys Walmart

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neinnunb

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This is bad, bad news.

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StealSniper

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This is actully a good thing, i mean EA has a fine organization and to those who think htis is a huge venture for ea right off, it is CLEARLY not. This will set them back for a while and it was smart. Not only that but the good of this is a much better production rate, and EA will be able to put their own share of knowledge in helping bioware/pandemic make that much better of a game. So don't jsut come spitting in your opinions just because you think you sound smart when you don't even know most of it, in the end this was a good venture for EA, and one that most of us should appreciate

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SuperGogeta24

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whus dis mean 4 battlefrontz? EA = next tesco

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darkblinkz

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Maybe they should buy valve next and show them how to be a good company lol

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Poshkidney

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What next? EA buy Bungie? EA make their own console!!!!??? i would like to see them do that

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mattjam3000

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omg i saw this and i couldnt stop hurling abuse at the screen.. bloody ea see theres lots of easy cash in mass effect and co so they go and buy them!!! soon it will be "ea buy ubisoft--includes ips like splinter cell, rainbow six and 200 more". if that happens i will refuse to buy anygame out of ea.. im sick of them just buying people out

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Elite_Ghost_R

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damn, more crappy framerates for ps3, fwck you EA!!

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xion2k4

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EA own bioware and there ip's they can demand what the want ........

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frosty118

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For everyone that is saying Bioware games are going to lack a certain quality in the future, i'm sure the company, being as big as it is would not allow the takeover bid the ability for EA to rush game development, the fact that so many people here are stating the opposite is utterly stupid and idiotic to read

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SirMonotone

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I'm beginning to hate EA. As long as they don't ruin any of Biowares' future games i'll be fine. But EA are just a huge company looking to make money, not brilliant games so this could (hopefully not) spell disaster. :(

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sja28

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at least we play the last good game made by bioware and thats mass effect cuz after that it will be semi good games with a expansionpaks like every 3 months

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Leick3

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NOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO The only way this could be good is if it caused more games to be made for the wii, otherwise part of the gaming industry just died.

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jaxrelax

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This is how how the games industry died

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jamesmonkey4u

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expect a lot more games out from ea that are low on quality rushed hashed games is ea more then not.

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Bill900

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Actually SOME of EA's games are pretty good. Such as the Battlefield series, Command & Conquer 3, The Sims 1&2, Medal of Honor Allied Assualt, and probably Crysis

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Icehearted

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What the fudge are they talking about "acquisition fills out a gap in [EA's] genre lineup,"? They took over Origin! They've done this sort of thing before and essentially murdered a role-playing classic! Oh, the Jedi are going to feel this one...

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leo4578

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wow, i thought the 32 million sony used to purchase motorstorm makers was a lot.

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Matt7895

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Valarauk, KOTOR never belonged to Bioware in the first place. KOTOR belongs to Lucasarts just like everything else related to Star Wars gaming. Bioware sold rights to use the Odyssey engine to Obsidian, nothing else.

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Valarauk

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Nolan16, if you had read the article, you'd realize that KOTOR is not part of the deal, because BioWare sold the rights to Obsidian like...4 years ago - so you can keep dreaming, but as long as EA keeps a hold on things, even if they're going multiplatform, the games are gonna suck, so at least Mass Effect is a good game for the 360, not all the crap that both platforms are gonna get in the future.

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