EA drops Warhammer on Mythic
[UPDATE] Warhammer Online maker bought and will be redubbed EA Mythic and will focus on MMORPGs, Jacobs and Denton to remain on board.
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Ever since the massively multiplayer online role-playing game World of Warcraft was released in fall 2004, Electronic Arts has looked on with envy as rival Vivendi has raked in millions. In March, the French media conglomerate's game division--which lost 203 million euros ($241 million) in 2004--reported a whopping 244 million euro ($289.9 million) one-year jump in earnings for the calendar year 2005.
The jump in revenue was thanks largely to WOW, which is developed and published by Vivendi subsidiary Blizzard Entertainment. The game now has over 6.5 million subscribers worldwide, filling the company's coffers with a hefty regular revenue of gold.
Not one to let an unexploited market pass it by, Electronic Arts today announced that it has entered an agreement to acquire the Virginia-based development studio Mythic Entertainment. The new studio will be renamed EA Mythic, and it will focus on producing MMORPGs. Financial terms of the deal were not disclosed.
Mythic is best known for its Dark Age of Camelot series, the medieval-themed MMORPG that first hit the market in 2001. It has since secured the license to make an MMORPG based on the Warhammer series, called Warhammer Online: Age of Reckoning. The game is scheduled to hit PCs in late 2007, and it did not have a publisher before today.
The acquisition of the studio could mean a foothold in the fledgling console MMORPG market as well. At E3 last month, Mythic let the press know that Warhammer Online was running on an Xbox 360. The game has not yet been announced for the 360, but would face little in the way of competition if it were. Currently, the only MMORPG for the platform is an HD-remastered, 3-year-old version of Final Fantasy XI, which has only seen moderate sales and tepid reviews since its release in April.
As far as management goes, Mythic CEO Mark Jacobs will stay on board, but will take the new position of vice president and general manager of the studio. Mythic cofounder and COO Rob Denton will stay on as vice president and COO of EA Mythic. The acquisition is expected to be finalized during EA's second quarter of its 2007 fiscal year, which runs from July to September 2006.
[UPDATE] For their part, analysts believe the deal is indeed a maneuver to take a bite out of the massive WOW pie. "Everyone's salivating at the cash VUG is generating," said Parks Associates' Michael Cai, who added, "It's all part of portfolio diversification efforts, similar to the [mobile publisher] Jamdat acquisition." Cai also said the buyout was also part of a "geographical diversification effort." "EA wants to get more revenue out of Asia and online gaming is the way to go," he said.
However, just because EA has bought Mythic doesn't mean it will make hundreds of millions of dollars off RPGs. "EA does not equal success," said Cai, "They've had their share of failures in the online gaming space like Sims Online, Earth and Beyond, and Motor City Online. They definitely want to try, though."