News Corp. eyeing Eidos?

Game-industry sources in the UK say the multimedia conglomerate is close to a "wholesale acquisition" of the Tomb Raider publisher.


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Two weeks ago, whispers began to spread that British publisher Eidos Interactive was on the verge of being bought by a then-unnamed party. The unsubstantiated reports were the latest in a months-long chain of buyout rumors surrounding Eidos since it revealed it was in "preliminary discussions" with corporate suitors last August. Past reports have named everyone from Ubisoft to a venture capital group led by U2 front man Bono as potential buyers.

The big difference with the latest batch of Eidos-takeover scuttlebutt is that it involves News Corporation. In recent months, the massive multimedia conglomerate, which already owns DirecTV, Sky TV, TV Guide, The New York Post, HarperCollins Publishers, and the Fox film studio and television networks, has been quite public about its desire to break into the game industry.

Given News Corp.'s size--it kicked off its 2005 financial year with a $536 million first-quarter profit, more than double Eidos' entire FY04 annual income of $241 million--a buyout of the cash-strapped, IP-rich Eidos would be a piece of cake. Such a move would also seem in character for News Corp. chairman and CEO K. Rupert Murdoch, who has championed an aggressive acquisition strategy since founding the company in Australia more than two decades ago. It would also likely be a preemptive strike against News Corp.'s archrival Viacom, whose own CEO, Sumner Redstone, owns nearly 80 percent of Midway Games and is moving aggressively to reenergize the publisher. (It would also be ironic, given Viacom-owned Paramount Pictures produced both Tomb Raider films.)

Now, it looks like the buyout may be happening. An informed source close to the British game industry, in general, and Eidos, in particular, today told GameSpot that News Corp. is on the verge of purchasing Eidos outright. "It sounds like a wholesale acquisition," said the contact.

If it comes to pass, a News Corp. acquisition could provide a very bright future for Eidos. Previously, the most common scenario was that a rival publisher would buy Eidos for its valuable original franchises, such as the Tomb Raider and Hitman series, and then lay the majority of its employees off. However, since News Corp. has no game-development or publishing infrastructure in place, it would probably retain most, if not all, of Eidos. "Mr. Murdoch looks likely to snap up the whole organization," the source told GameSpot. "He'll want to retain the structure, as it gives him immediate access to content and distribution. So it's not likely he'll gut it."

As word spreads, some press outlets are speaking of the News Corp. acquisition as a done deal. However, nothing is official--yet--as American and British representatives for Eidos had not responded to solicitations for comment as of press time. But until any deal is formalized, it is likely any statement given will be similar to one recently offered to GameSpot by a corporate officer, who said, "I can't comment on this, at the moment, other than to say the strategic review is ongoing."

GameSpot will have all the latest developments in the Eidos-acquisition saga as they occur.

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