EA's John Riccitiello
Electronic Arts has bought back two development studios from U2 frontman Bono's Elevation Partners for and estimated $860 million (£424m) or $775-million - depending on sources. Either way, the purchase is the biggest in EA's history and sends it into battle with fellow US games giant Activision on the acquisition trail.
Pandemic (Mercenaries) and Bioware (Neverwinter Nights) were originally purchased by the Bono-led investment company Elevation Partners in 2005. At that time, current Current EA CEO John Riccitiello worked at Elevation.
The two developers employ approximately 800 people across four studios in Edmonton (Canada), Los Angeles (USA), Austin (USA) and Brisbane (Australia).
Bioware, of course, is developing the much-anticipated Mass Effect as an Xbox 360 exclusive. Whether, as was the case recently with Activision's acquisition of Project Gotham creator, Bizarre Creations, Microsoft immediately announces that the Mass Effect IP is its and its alone remains to be seen.
When Elevation purchased the companies in 2005 for an estimated $300m (£145m), it also set up a holding company - VG Holdings - to administer the developers.
Riccitiello rejoined EA in February this year, with Greg Richardson taking the role as CEO of VG Holdings.
In a press statement, EA breaks the deal down as follows: "Electronic Arts (ERTS) said it will buy VG Holding from private equity firm Elevation Partners for $620 million (£305m) in cash, while issuing $155 million (£76m) in EA stock to certain VG employees. In addition, EA will lend VG Holding $35 million (£17m) "through the closing of the acquisition" - this closure is thought to occur in January 2008.
Pandemic (Mercenaries) and Bioware (Neverwinter Nights) were originally purchased by the Bono-led investment company Elevation Partners in 2005. At that time, current Current EA CEO John Riccitiello worked at Elevation.
The two developers employ approximately 800 people across four studios in Edmonton (Canada), Los Angeles (USA), Austin (USA) and Brisbane (Australia).
Bioware, of course, is developing the much-anticipated Mass Effect as an Xbox 360 exclusive. Whether, as was the case recently with Activision's acquisition of Project Gotham creator, Bizarre Creations, Microsoft immediately announces that the Mass Effect IP is its and its alone remains to be seen.
When Elevation purchased the companies in 2005 for an estimated $300m (£145m), it also set up a holding company - VG Holdings - to administer the developers.
Riccitiello rejoined EA in February this year, with Greg Richardson taking the role as CEO of VG Holdings.
In a press statement, EA breaks the deal down as follows: "Electronic Arts (ERTS) said it will buy VG Holding from private equity firm Elevation Partners for $620 million (£305m) in cash, while issuing $155 million (£76m) in EA stock to certain VG employees. In addition, EA will lend VG Holding $35 million (£17m) "through the closing of the acquisition" - this closure is thought to occur in January 2008.
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Comments
hollywooda 12 Oct 2007 10:16
1/4
i hope this doesnt mean the end of creative freedom for these two companys....
Joji 12 Oct 2007 11:54
2/4
That's exactly what it means. Any company that gets eaten by the EA whale, ends up chained to franchises. It quite simple, EA want to please share holders. When their needs for making money become priority, creativity and risk goes out the window.
A good example of this is Criterion and Burnout. Criterion have only made Burnout games in the last few years. Their only deviation from it was Black. That's one original game and Criterion have only made Burnout games since 2001. Criterion also developed their acclaimed Renderware engine, which EA later canceled (when it can be perfectly used to create Wii and PSP games, what's up with that?).
While I love the series and I'm looking forward to Burnout Paradise, do you really think all Criterion want to make is Burnout forever? I doubt it.l
EA would have never have green lighted a game like Mass Effect (probably would have been to ambitious and costly for them to open their wallet), and I fear Bioware will now be chained to that game, if it runs into a series. Same goes for Pandemic. I have their excellent Mercs game, the sequel looks cool. Sabutoer (shown at E3 07, but missed by many journos) also looks fab too.
EA would not make games like this because it has more faith in money and less in developers. Why on earth do you think the good-looking-but-really-poor Boogie suffered? Because it was rushed to market and ill thought out, with dollars signs in their eyes from Wii gamers.
Why does Elite Beat Agents and Ouendan trump Boogie anyday? Because making a decent fun game was small indepedant developer Inis' goal, over the money angle. I long for the day these publishers leave smaller developers alone to grow and create fresh product and take risks, the likes of EA hate doing.
Buy small shares, fine, but buy out, no.
A good example of this is Criterion and Burnout. Criterion have only made Burnout games in the last few years. Their only deviation from it was Black. That's one original game and Criterion have only made Burnout games since 2001. Criterion also developed their acclaimed Renderware engine, which EA later canceled (when it can be perfectly used to create Wii and PSP games, what's up with that?).
While I love the series and I'm looking forward to Burnout Paradise, do you really think all Criterion want to make is Burnout forever? I doubt it.l
EA would have never have green lighted a game like Mass Effect (probably would have been to ambitious and costly for them to open their wallet), and I fear Bioware will now be chained to that game, if it runs into a series. Same goes for Pandemic. I have their excellent Mercs game, the sequel looks cool. Sabutoer (shown at E3 07, but missed by many journos) also looks fab too.
EA would not make games like this because it has more faith in money and less in developers. Why on earth do you think the good-looking-but-really-poor Boogie suffered? Because it was rushed to market and ill thought out, with dollars signs in their eyes from Wii gamers.
Why does Elite Beat Agents and Ouendan trump Boogie anyday? Because making a decent fun game was small indepedant developer Inis' goal, over the money angle. I long for the day these publishers leave smaller developers alone to grow and create fresh product and take risks, the likes of EA hate doing.
Buy small shares, fine, but buy out, no.
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hollywooda 12 Oct 2007 13:35
3/4
this is the biggest problem with this gen of games, the rising development costs means that smaller developers just don't have the ability to compete or grow at this level & a take over from a bigger developer is enviable. Its what these bigger companies then do that counts, if they break up bioware & consume it into the cookie cutter machine or give it the backing to allow it to branch out & innovate?. EA, would have to be crazy to stop or interrupt bioware in anyway.
But business is business, Mass Effect will have to be one heck of a game 4 them to back another 2. That's paying the wages of a full company for the next 4 years. But EA have to allow these companies to do what they do.
But business is business, Mass Effect will have to be one heck of a game 4 them to back another 2. That's paying the wages of a full company for the next 4 years. But EA have to allow these companies to do what they do.
Flick 12 Oct 2007 18:06
4/4
Well EA bought Mythic recently too. I've followed the progress on Warhammer Online and i don't see much meddling from EA. I think they will leave Bioware alone most of the time.
The best part about this is that we'll probably see Mass Effect become cross platform much quicker. I'm looking forward to playing it on my PC.
The best part about this is that we'll probably see Mass Effect become cross platform much quicker. I'm looking forward to playing it on my PC.