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.

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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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king258

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they not messing up mercs right?

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lucas_kelly

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Screw EA. I hate them.

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adamias13

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i agree with you ardiendo in that this means theese developers will be able to truly shine but when i look at the big picture i just dont think its good for EA to have this much power it just doesnt feel right.........

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Ardiendo_1

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$860million is a huge takeover and means EA will have A LOT resting on the BioWare division in order to recover their money. It basically means we will be seeing a lot more BioWare/Pandemic games (which is good because I like games made by both companies) but the downside it these games will inevitably be less polished upon realease than previous titles made before the EA takeover. You never know it could be a good thing after all these companies will be getting a hell of a lot more money and marketing now EA owns them.

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Factor-Zer0

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EA destroys every IP they get their greasy hands on.

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MOOKUU

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I personally feel this is HORRIBLE news because IMHO, EA SUX A**!!! Every game they put out is TRASH (cept Madden) and im epecially disgusted by the lackluster efforts of both FIFA and NBA LIVE. I can say one thing for sure and that is Biowares reputation just fell into the trash with me since NONE of there games are gonna be at my expected standard for them...

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acu02151

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Wasn't the reason bioshock was so named and not system shock 3 was because EA owned the IP? But even though EA owned the name nobody who was involved in the making of system shock actually worked for them. How long do you think it will be before you start hearing of "spiritual successors" to a lot of the IPs that EA just acquired.

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F1sTDaCuffS

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i bet 860 million dollars they never make there money back.

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TTDog

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"fluerxx: Hopefully this means a KOTOR:3 could be heading towards the PS3." Thought LucasArts (or whatever they're called) owned the IP on that one and it was just written by Bioware... KOTOR 3 will be unaffected by this.

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PatchMaster

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EA is proof that the more crap games people buy the crapier the good games become. In other words, stop padding EA's wallet by buying Madden every single year or games like Mass Effect will become butchered or possibly non-existent

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TTDog

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So what if Mass Effect eventually finds its way to the PS3? It'll still be on the 360, its not as if 360 owners would be losing out just because the cows can play to.

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fluerxx

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Hopefully this means a KOTOR:3 could be heading towards the PS3.

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iceuk

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Uh oh.. EA is the grim reaper of games.

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shortster1

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I really hope that this game comes out for ps3 now that EA owns it because i only have a ps3 and mass effect looks great and i would like to play it :) i really hope it comes out but i doubt i will :(

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McGregor

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well, now that bungie is no longer owned by microsoft i wonder when EA is going to snag that up...

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Cirus2

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GRRR more hatred towards EA the nobs buying out all good companies, watch Valve go next :'( then bye bye Half life 3 etc

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AMK_87

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I dont know what to think... - Having such giant as EA covering your back is allways something good. Good marketing/promotion never damaged a game, so its better now. - Its true EA has damaged lots of franchises (MOH anyone?) but lately EA lets the devs do the work and doesnt gets in (Criterion, Crytek, Flagship, etc). - The most probable thing is we are gonna see EA logo dozens of times before actually playing some Bioware game, but its no big deal. - Bioware can become EA Bioware, just like Mythic became EA Mythic. Crytek doesnt apply as its not owned by EA. On the other side, Criterion is already a couple of years under EA hands and no name change... - As long as EA lets our Canadian friend do their job, nothing is going to be wrong. Most, if not all, of Bioware games are 9/10 or better, top notch AAA titles, and I dont see that changing from one day to another. - The only part that actually worries me is the ambitious 300 million dollars/year earnings forecast.... i hope this wont affect the quality of the main PC/360 titles. - Experience also tells us that EA will probably make the 'quick buck' releasing cheap spin-offs, i think mainly on Wii/DS platforms, but as I said, as long as the main franchise titles remain AAA quality, it will be OK.

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McGregor

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oh i hope this doesn't affect great games. and i hope that microsoft keeps the mass effect trilogy.

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matthewjackman

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NOOOOOOOOOOOOOOOOOOOOOOO! *cries*

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DiscGuru101

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Evil has spoken.

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Marill

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Origin Systems, Bullfrog, Westwood, etc.... all great studios that produces great games, after bought by EA, produce crap now...... Now it is Bioware's turn.... goodbye Bioware

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Phenix110

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Noooooooooooooooooooooooooooooo not again.

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SalarianChemist

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According to the contract, Microsoft Game Studios is the Publisher of a "trilogy" of games that Bioware Corporation will Develop. EA becomes the official owner of Bioware on January 1, 2008. So, this won't really have any impact at all on the first Mass Effect game. However, even if Mass Effect were to potentially be delayed until some point in 2008, Microsoft Game Studios would still be the Publisher of the game, not Electronic Arts. Microsoft Game Studios and Bioware have been working together in a way that makes it clear that Mass Effect is a trilogy of games that Microsoft Game Studios would Publish...mainly because Bioware is a Developer, not a Publisher. However, Bioware is now a Developer that is owned by a Publisher--Electronic Arts. This means that EA likely would want to Publish Mass Effect 2 and Mass Effect 3 on the Xbox 360. If Microsoft Game Studios were to allow that to happen, I think it goes without saying that the condition would be that the game remains exclusive to the Xbox 360. Bioware will still make money as a developer, which will ultimately help EA, even if Microsoft is doing the Publishing. But there are two things to keep in mind: (1) Bioware and Microsoft have an agreement to release a Mass Effect "trillogy" of games exclusively for the Xbox 360. (2) Microsoft and Bioware have a great relationship for doing business. The chances that this will affect their contracts for Mass Effect games is very small. After all, EA bought Bioware because they "liked" what they were presently doing.

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bocephus_01

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it's over

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King-Zetune

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Excuse me people but those saying that Mass Effect needs a lot of money to make, well your right, but in that game the Publisher is MICROSOFT... I mean that is not the reason they sold there company,, M$ can give them 100 million for the game and EA can give them about 30 million at most... P.S. EA if you Skruu Mass Effect,,, I will not do anything except not buy your games,,, as well as many other fans... But what you got to worry is about messing with M$, cause if you blow it, I will pray they take you down with a 2 billion check,, and get all those Chairman out of your company and clen the trash out of the studio.. And I would also worry about the real, real real geeks who might get a little violent on you,, but that ain't me. Remember this EA because if you do skru it well, justice will be done upon you by M$ But perssonally Im kind of joking...because having more money into game development makes a better game, and I beleive EA will let more of a distance on the studios and that is good.

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fr33_loader

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A lot of psychics and fortune tellers here. Can I borrow your time machine? Please! I wanna see the future too.

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adamquerques

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Does this mean that EA will have a hand in the development of said BioWare titles, or will they just profit from owning the license? I pray that it is merely the latter, or else EA is going to take BioWare's genius titles and just throw them on top of their notorious cookie cutter pile of sh*t.

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Jagzthebest

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they are most likely to get Ubisoft next. They own a 20% stake in it.

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ShockerX01

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Should start calling EA the "Borg." They assimilate everything. ;\ I miss Westwood Studios.

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ChrisDESTROY

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ea aren't really having much to do with the games being developed by bioware/pandemic from the sound of it, plus being owned by such a big company can mean that more money may be put towards bioware and pandemic's future projects meaning that we may end up with even better games than if they remained seperate

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Ced_Quijote

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£@€|

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redfox66

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Demonic EA consuming all companies to make a super demon called....dave.

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carllfc

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Consider those games destroyed, lulz.

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VolcanoMan001

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Thus begins the slow death of the once great Bioware.

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beanofengland

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i don't think its an end of the world scenario here. the studios are responsible for their games, and just because EA now owns them doesn't really mean that things are going to go downhill. most gamers see the EA tag and just think about all the sports games they make and how they just rob the stupid people who buy those games' money every year with their latest installment. this won't translate over to other games e.g. FPS, RTS or whatever, its down to the developers to make the sequels and ensure that they are up to scratch. if anything having EA put more money into their pockets is obviously a good thing, giving them more staff and resources to make the games even better. now there may be cases of EA screwing things up in the past, but then look at other games made by other developers, dues ex 2 is a prime example here... things can just go wrong.

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hazaa54

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Hopefully im just overreacting, but I really hope EA doesn't **** Bioware up. They're my favorite developer, and I would be devestated if their quality of games was lowered because of their working under EA. Again, hopefully i'm just overreacting, but it'm anxious to see how this one turns out.

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mtron32

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you people have problems. No one put a gun to the heads of Bioware and Pandemic and forced them to sell. The days of independant studios are over. The reason being that no company of 50-100 employees has the resources to bankroll the games that YOU fans expect to play. Mass Effect is beautiful, but it probably cost the publisher around 20-30 million to produce. Oh, and why bash EA? It's not thier fault that people keep buying the games. If people are so outraged, then they'd vote with thier dollar, obviously the vast majority doesn't really care as much as the few whiney gamers on the forums. This is capitolism in action right here, and at the end of the day, some people over at Bioware and Pandemic just got a huge payoff for thier efforts over the years. WHAT"S WRONG WITH THAT? The games are still going to come, hopefully multiplat so my friends with PS3s can enjoy Mass Effect as well.

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BoogieManZero

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I think EA rushes devs a little bit, that may be the reason for the watered down feeling on their games. However there is no argument that EA has a lot of money and that can be a very big advantage for game developers as well. No doubt any EA game produced will get plenty of screen time from a decent ad campaign. Not to mention EA typically is willing to give plenty of details to websites like this, so we will get more info on the games we love. On top of that we will probably see a decent online component for whatever games need it. EA may be a power hungery corporate monster, but they have money that most developers need.

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maulstik

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Noooooooooooooooooooooooooooooooooooooooooooooooooooooooo Does this mean we get Battlefield: Baldur's Gate or Neverwinter Madden?

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iliyun

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taisui One small step for EA, one GIANT disater for mankind.

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blightfear

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I hate EA!! they are absolute s***, but have sooooo much money that they can stick their greedy little chubby fingers in any pie they want. and now they have! GRRRRRRRRRRRRRR!!!!! EA turns everything they touch into s***! mass effect will rock the world, but mass effect 2 will suck ass and be filled with adverts and lame 'groundbreaking new control designs'. :'(

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Nicolas00-0g

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NEXT NEWS :EA buys Namco Bandai, Ubisoft, Atari, Capcom, Columbia TriStar, Universal Pictures, etc. If EA sucks, just change the EA's president. Everything will go back normal. Not all games from EA are bad. EA is just another big company : Buy anothers, make good and bad games. Every company does good and bad thing. And that problem with Microsoft in UK ? You remember ? EA isn't perfect, Microsoft isn't too. Nothing is perfect. And if these news Mass Effect games become better ? And if they still exclusive to 360 ? You're too persimist. Just sit and wait.

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GhettoTaxii

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EA is known for making extremely watered down games, hence the reason why I cannot remember a truly good game made by EA besides Sims EVER!

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taisui

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One small step for EA, one GIANT disater for mankind.

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Pfilosophy

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...dammit...

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bartonle

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@Jebril But, if Mass Effect is now owned by EA, seems like they could publish it for PS3 and let Microsoft publish it for Xbox 360. Kinda like what they did with Orange Box.

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iliyun

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kambion313 dude i so agree. it's over. it's all over man.

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RaiderVC

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I don't know, everyone freaks out when EA acquires a new developer, but considering they have so much money to give to developers, and the kind of products Bioware/ Pandemic make, I wonder if they will really ruin most of those good franchises. Activision and Ubisoft need to team up or something and wreck EA....

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xion2k4

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<< LINK REMOVED >> good read a little in site into how EA treats its workers

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CrushedGroove

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This is some of the worst news imaginable. We can say so long to innovative and original games from Bioware/Pandemic. EA will now just whore their titles into the ground before finally closing the publishing houses all together. Some of my favorite titles have been made by Bioware, and it pains me to know that it is over for them.

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