EA stock feels burn, Universal stokes Inferno

<i>Wall Street Journal</i> muses a Disney takeover of share-price-challenged publisher as <i>Variety</i> reports movie studio has landed rights for unannounced game set in depths of hell.


Last week, Electronic Arts made headlines for posting a $310 million quarterly loss and laying off 6 percent of its workforce. As a result, its stock took a drubbing on Wall Street, dropping over $3 per share in after-hours trading to end the week at $22.78, just above its one-year low of $21.91. As a result, the publisher, which recently was poised to acquire rival Take-Two Interactive, has become the subject of takeover talk itself.

In a piece this past weekend (subscription required), Wall Street Journal columnist Martin Peers mused that media giant Disney might buy EA outright. He points out that the Redwood City, California-based publisher's market capitalization is now just $7.2 billion, down from $19 billion "a few years ago." Peers believes that, given the near-certainty its value will rebound, EA is a great bargain for a larger media company to scoop up, and that Disney--with its better-than-average stock performance--would be an ideal suitor.

But while the Journal article is purely speculative, Variety had more concrete news involving EA. Namely, that the publisher has struck a deal with Universal Studios to make a film based on yet another of its games. According to the Hollywood trade, the agreement came after a brief bidding war, which had Paramount, MGM, New Regency, and Warner Bros. all interested.

More remarkably, the game in question hasn't even been announced yet. Titled Dante's Inferno, it is reportedly about "a journey from the depths of hell" and would presumably be inspired by medieval author Dante Alighieri's book The Divine Comedy. No developer or platforms were mentioned, though Variety did say it was set for release next year.

The Universal-EA deal comes just over a week after the pair inked an agreement on a big-screen version of Army of Two. EA has also sold the film rights to The Sims to 20th Century Fox, while producer Avi Arad holds the movie license to Mass Effect, made by EA subsidiary BioWare. The production status of those two projects is unclear.

As of press time, EA reps had not returned requests for comment about either the Journal or Variety articles.

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