EA & PopCap
Thu Jun 23, 2011 · 3 min

So the rumour du jour of course is that EA are attempting to buy PopCap for $1 billion (according to TechCrunch; VentureBeat also has coverage). I was looking forward to PopCap going public, for a couple of reasons. First, I was curious to see the inner workings of the company opened. Secondly, I think it would have been a great thing for the industry in general to step eating its own young and have a potentially hugely-powerful new pillar besides the usual suspects.

Both pieces linked above have some weird bits of reporting, though:

EA have gone on the record as saying they're reinventing their business as fast as they can to take advantage of the opportunities available in digital. PopCap built their business in digital, and have a great track record of introducing successful new titles.

EA's interest in PopCap is nothing to do with getting into markets they're already doing quite well in. EA's interest is centred around PopCap's ability to continually introduce new games and to make money from them. That's why they bought Chillingo rather than Rovio. The fact that PopCap have also making interesting deals in Asia can't have gone unnoticed either.

There's also some consternation over the price, and I've seen various people saying it's a sign of a bubble. My take is that $1bn is basically the minimum price required to stop PopCap going public - anything less wouldn't be worth their while. Given how well they manage to grow their revenue and take advantage of new platforms, I think it may actually be a relatively cheap deal in the long-term. PopCap may also be thinking that the impending Groupon IPO will actually screw up their opportunity, given all the concerns about Groupon's ability to actually turn a profit.

From EA's point of view, I'd say it's a great deal. I'd (clearly) prefer that PopCap stayed independent. PopCap themselves provided an unofficial politician-esque response saying that "the company was not planning to sell to any other company for $1 billion" - so they might be selling for a different price, then. We shall see.

blog · about · birthdayfy · home