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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solidsnake7882

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As much as this sucks if EA was taking over i'd be even more pissed however all they are is a publisher nothing more. Bioware will still run like it used to.

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Puckhog04

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"@Puckhog04 what part of: " the deal will make EA the owner of the Mass Effect, Jade Empire, Mercenaries, Full Spectrum Warrior, and Saboteur properties." doesnt make sense to you? if you own it you can do whatever you want with it. Ps3 version od mass effect coming fall 08. quote me." Whatever helps you sleep better at night. Twist it how you want, it's still a 360 exclusive. Doesn't that make sense to you? :P Whine and guess all you want, the facts are there. I can't tell the future but, hey, if you can then more power to you. Either way, heh, i get to play it for certain. I'm happy.

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jigglebilly1983

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@Puckhog04 what part of: " the deal will make EA the owner of the Mass Effect, Jade Empire, Mercenaries, Full Spectrum Warrior, and Saboteur properties." doesnt make sense to you? if you own it you can do whatever you want with it. Ps3 version od mass effect coming fall 08. quote me.

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Puckhog04

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Damn, EA just keeps trying to make the industry fail. Such a terrible company...first the NFL license and now this. MS is already publishing Mass Effect though people...so keep dreaming.

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madmachinegun

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god i hope they don't destroy Pandemics's and Bioware's ideas. as if EA wasn't already big enough--bet they get hit with an anti-trust lawsuit soon

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andrew_ribbons

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If it went onto PS3, it's crash the console, as UT3 is doing, which has been delayed until 2008 for that very reason. No Pile of Sh1t 3 deserves a game this good. Besides, it's being published by Microsoft Game Studios, not EA.

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redfox66

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EA wanna make lots of money so ofc mass effect will come out on ps3 with some extras and it will prob be out 2008 july.

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ShmenonPie

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Does this mean Mass Effect will no longer be ecxlusive, if it's owned by EA? It'd be nice to have it on PS3, even though I think it'll flop.

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Gamingcucumber

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Gamingcucumber does not approve EA's way of making business and lowering the standards on games.

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Nolan16

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Bioware is now going to go Multi-Plat god this is wonderful for me as a PS3 User. i already made my statement down a bit scroll down and see what i said if you are going to question me.

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CaptainLunchbox

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Scads of eye-searing in-game advertising...... And EX Trax... Ugh....

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xion2k4

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EA owns the mass effect ip so don't hold ya breath

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kevo14

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i smell Monopoly

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riegod

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no it won't

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210189677155857843583653671808

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will mass effext now come to PS3

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maddog619

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HawkOfNavarre why the hell would it be a bad day? you have to justify you answer!

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maddog619

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did some one delete my post?

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HawkOfNavarre

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Mass Effect is already being published so they cant break that game at such a late stage. But t'is a sad day for gamers universally -.-

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maddog619

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maybe MS will buy EA.

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maddog619

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death1505921 you do not know what the hell you are talking about. first ea is the biggest and most popular developer and has some of the most award winning games ever!! check what you say before you thank what you think you know what you are talking about.!!

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martin_f

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What next? EA buy Bungie? EA make their own console!!!!???

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Azhar85

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so..let it be...as long as EA published a great games from great developers...let's hope 4 it...

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death1505921

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NOOO!!!!!!!! FFS, EA will just destory those IPs. ****ing hell. Everyone knows EA just creates crappy games for the money.

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blargon66

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please make a baldurs gate 3, ahhhhhhhhhhhhhhhh and pc only

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mattcake

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I look forward to Mass Effect 2 coming out in exactly a years time then, identical to Mass Effect except with new player skins, slightly modified movement and half the bugs fixed and replaced with new ones.

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xion2k4

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ZebethOrZebes Uhh, did Orange Box suck because EA helped Valve market and distribute it? No, it got 9.5 and it deserved it. Mass Effect and Mercenaries II will now be played by more people because EA will be able to make more people aware of it. Most of EA's internal studios may be producing some trash at the moment, but they know to keep their hands off their best developers' projects. (Look at how they're letting Will Wright handle Spore, for instance.) that sounds like EA marketing trying to do some damage control really EA bought out bioware they own them,there in EA's pocket unlike valve where they just publish there games

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mattkorn

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"EA paying $620 million in cash" haha

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whomps

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EA, Please do not mess up Mass Effect. Also, how do they expect to run an mmorpg on their garbage servers.

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KnightsofRound

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A sad day for gamers.

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NeoNavarro

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I can only see us gamers benifiting from this crazy move. I can't really think of many legit downfalls of this. Keep an open mind and just wait and see what come out from this ... I guess thats all we can do.

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ZebethOrZebes

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Uhh, did Orange Box suck because EA helped Valve market and distribute it? No, it got 9.5 and it deserved it. Mass Effect and Mercenaries II will now be played by more people because EA will be able to make more people aware of it. Most of EA's internal studios may be producing some trash at the moment, but they know to keep their hands off their best developers' projects. (Look at how they're letting Will Wright handle Spore, for instance.)

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Fenriswolf

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Well Mass Effect 1 is still being published by MS and is a confirmed X360 exclusive, unless EA buys off the rights off them. According to the interview: Mass Effect will continue to be an MGS game, at least the current iteration, and Sonic will continue to be published by Sega, correct? RM: Yep. Microsoft and Sega are great partners, and we're proud to work with them. Mass Effect is... certainly Microsoft has added a ton of value to that product, and it's an Xbox 360 exclusive, and we really hand-crafted it, really carefully, to make sure that it's taking full advantage of the platform, and the fans are going to get a great game out of it. It's been a great partnership with Sega as well. We're really proud to work on the Sonic RPG for DS.

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Soldaten027

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Goodbye competion, Hello Monopoly. What the hell is going on here! Crap, soon we're going to be playing cloned copies of bland games with no competition out there to best it

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jacob-goodlich

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really great news for us sony fanboys, pandemic is behind lots of great games, oh the possibilities

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PillsberyDoeMan

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hmm

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spy_hellscream

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EA eh, thats alotta change and hopefully they won't mess with the games to much, I've seen EA destroy games and build them up...I'm just hoping they help the companies build the games up, I mean look at C&C 3 that game is a big hit and EA pushed it along....and lol @ the console wars in the comment section, everyone knows the PC kicks more tail =)

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bartonle

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@Darth Slayer, yeah yeah, so what if we got a madden running at 30fps. I would still way prefer a reliable PS3 system than an RRoD xbox 360.

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batosaims

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mass efffect will not be on the ps3 ever because ms owns the license and the publishing rights ea cant do anthing about that and mass effect will be done before the deadl is final so if ea tries to mess with the first mass effect game license or publishing rights microsoft will take ea down sry sony fanboys no mass effect for u heck no good bioware game for u either

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Fenriswolf

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Nice try PSTools, but KOTOR is owned by Lucasarts, not Bioware. And Microsoft is currently negotiating with EA over Mass Effect, so don't expect to see Mass Effect on PS3s, at least until 2009 running at 30 FPS.

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glhx1rush

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The only thing that would have made this news complete would have been a mention of Uwe Boll's involvement in the deal, gag.......

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Charlie2688

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860mil! I think I just choke with my cookie @. @

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wathewat

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sigh.......i hope bioware can maintain its rep and prestige after this....ea expects 3 to 4 games A YEAR mass effect has been in development for the last 3 or 4.........sigh truely one of the last bioware polished games....that also means mass effects sequals might not be too good as the original...i hate this news

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bartonle

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@Nolan16 right on man, this might be great news for PS3 users. Not so good for 360 users though. We still have a number of great sony exclusives. Man, It's a great time to be a PS3 user.

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Nolan16

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Lol 360 users are going to be pissed off, a course they just lost tons of exclusive game titles. But for a PS3 user like me this news it fabulous Mass Effect will be the last exclusive Bioware game for 360. Because EA just dished out 800mil and they are going to want to make a huge profit increase from this, thus you will see Biowares games for now on going multi-plat. Ha-ha it sucks to see such a great company be token over by the big boss of the gaming industry, it does suck only if you are a 360 user lol! This news puts a huge smile on my face. You guys may say bull crap this isn’t going to happen and blah blah blah but I’ve been a EA Customer for so many years now I cant count the years any more and as they rise threw the ranks they got less untrue and more money hungry as the great quality games diminished. As there profit benefits and greed of EA got bigger all this was from EA was a stunt to make more money in the long run and they probably will because money comes first with EA it's a proven fact they’ve admitted about the 360 and PS3 difference in madden 08. Now it bites 360 users right back in the ass. Imagine the money EA can rake in, picture Kotor3 on PC 360 and PS3 there eyes see dollar signs as 360 users eyes turn red and PS3 Users laugh at the lost opportunities and Exclusive Bioware games of the future the 360 would have had.

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Spotswoode

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oh man, Bioware's just gonna be held back by EA now. damn.

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bartonle

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I really don't see this as a big deal people, don't see why everyone is so upset?

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opecube

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Sweet...Mass Effect for PS3 will come because EA will need make all the money it can to justify the purchase of Bioware!

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zombey1333

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Oh crud. EA's gonna jack something else up. I've never liked EA. How could I? They went down hill when they started concentrating mainly on sports.

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An9eluS

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I worked for EA for the last year in QA and all I can say this is a very depressing story... We always entered every tiny bug we found and then at the end of a production period any bug that was a class C or below got deferred entirely, right towards the end even B's got ignored. People say EA have s**t QA but we really arent, the bugs we find just dont get fixed! (I wont mention what games) Its sad to think that Bioware has been bought out by a company like that isnt it... I will buy Mass Effect next month as I fear it may be the last true 'Bioware' game... R.I.P - Bioware???

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Yulaw2000

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NOOOOOOOOOOOOOOOOOOOOOOOO!!!

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