Microsoft may purchase EA

[flameboy]

Scuttlebutt is going around Wall Street regarding a possible takeover of Electronic Arts at the hands of Microsoft. Talk of the potential buy has been dismissed as "unsubstantiated chatter" by Reuters, but rumors among traders have already served to drive up the stock of both companies. EA stock is up 5.24% to $19.36, while MS increased by 0.9% to $26. Some traders, at least, are banking on the possibility.

Whether purely the product of imagination or a legitimate piece of inside info, the rumor is plausible enough. The last year has seen a steady fall in videogame sales, the largest sales drop in nine years, leaving EA in a potentially weakened state. Such acquisitions have happened increasingly often, as in the case of "Activision Blizzard", and Zenimax/ID, and even EA's own attempts to acquire Take-Two.

Just how such a buy would change the face of the industry is difficult to comprehend. With EA dominating 20% game publishing market share and Microsoft 35% of hardware sales, the two combined would represent an absolute monolith. Or, at the very least, a chance to have a playable John Madden character for Halo 3: ODST's Firefight mode as DLC.

 

http://www.1up.com/do/newsStory?cId=3176152

[Daft]

I was just about to post this.

 

This would be incredibly bad news for the industry.

 

Anyways aren't we meant to be in some kind of recession?

[Jimbob]

I was just about to post this.

 

This would be incredibly bad news for the industry.

 

Anyways aren't we meant to be in some kind of recession?

 

We are yes, but don't Microsoft have "unlimited" funds (just about).

 

If Microsoft bought EA, it would be bad for the whole gaming industry.

[MATtheHAT]

Sounds like a ploy to drive share price's up.

[Gizmo]

Yeah struggling to see this as a good thing. FIFA, Madden being 360 exclusives? Nuts.

[Jimbob]

Yeah struggling to see this as a good thing. FIFA, Madden being 360 exclusives? Nuts.

 

It would be bad for Sony.

[dwarf]

As soon as I saw that I thought 'No Fifa on PS3'. This sort of thing you never really think about, you sort of take EA games for granted on all systems, they've always been floating around.

For them to be abailable on M$ systems... That would be annoying. Then there's stuff like Dead Space and the occasional good game they make that we'd miss. Not that I've played Dead Space other than the demo.

[MATtheHAT]

I'm pretty sure I read somewhere that the NFL and other major sports licence's where granted to EA on the proviso that the games where multi-plat.

 

Of course I can't back that statement up because I can't remember where I read it, or even if it is actually true.

[Gizmo]

If the next Madden was 360 exclusive sales would rocket so much in the US. Same goes for FIFA over here. It would be worth the investment for MS from those two games alone.

 

EA have really upped their game in recent years too. They aren't the evil corporation they once were, though Activision seem all too happy to take that position from them. Mirrors Edge / Dead Space last year, Rock Band, stuff like that. Oh, and this would mean no more PS3 ports of the Valve games, EA did the PS3 Orange Box didn't they?

[dazzybee]

Surely not. This would be disastrous.

 

This is why I hate microsoft. It hasn't happened, and it's probably not true. But this is the kind of thing they do, what they tried (and were pretty successful in doing) in the home computing market. Destroy the competition so they're the only viable option.

 

To quote Anakin Skywalker - "I HATE THEM!!!!"

[Ashley]

Hasn't everyone been rumoured to buy EA at some point?

 

(or is it EA has been rumoured to buy everyone else...whatever...its all rumours)

[Aimless]

Yeah struggling to see this as a good thing. FIFA, Madden being 360 exclusives? Nuts.

That wouldn't happen, EA would lose the licences to make those products if they were going to be confined to a single platform. Same goes for the likes of Harry Potter, too.

 

I don't see how a deal like this would benefit either company. Microsoft would gain a good chunk of IP, sure, but no doubt it would be cheaper to pay EA for exclusivity on a case-by-case basis if that's what they're after. The big sports franchises would go to someone else, presumably 2K with Konami taking FIFA under its wing. EA would have to downsize considerably, stripping the vast majority of staff not working on the Xbox and PC. Oh, and you could say goodbye to EA Partners.

 

Basically this isn't going to happen.

[Bren]

Oh, and this would mean no more PS3 ports of the Valve games, EA did the PS3 Orange Box didn't they?

 

Valve stopped supporting PS3 after orange box, they didnt like it!

 

I think this would be mint, somethin big like this might make it a one console (or two including nintendos family console) thing, which would be a lot easier for everyone me thinks!

[dwarf]

Even though that won't happen Skunk, I really hope it doesn't anytime soon. 3 consoles means there is this sort of culture on the nets and poking fun is good. Plus it's more competitive when there are 3 seperate companies, quality of games wouldn't have been as good otherwise, I don't think.

[McPhee]

That wouldn't happen, EA would lose the licences to make those products if they were going to be confined to a single platform. Same goes for the likes of Harry Potter, too.

 

I don't see how a deal like this would benefit either company. Microsoft would gain a good chunk of IP, sure, but no doubt it would be cheaper to pay EA for exclusivity on a case-by-case basis if that's what they're after. The big sports franchises would go to someone else, presumably 2K with Konami taking FIFA under its wing. EA would have to downsize considerably, stripping the vast majority of staff not working on the Xbox and PC. Oh, and you could say goodbye to EA Partners.

 

Basically this isn't going to happen.

 

Who's to say Microsoft would tie all franchises to the Xbox 360 exclusively? If they do buy EA (which i doubt they will, they were likely just expressing an interest) it'd make far more financial sense for them to retain all of these licenses by supporting Fifa, Madden, etc. on all platforms and just moving the majority of other games to the Xbox 360. This way they don't loose the valuable licenses and they still get to use EA's franchises to attract people to the Xbox and Games for Windows platforms.

 

The number of franchises that this would put under Microsoft's belt is phenomenal though. I'm not so sure it would be a good thing, it's unlikely to add much benefit to the consumer. I'd rather see them pick up some smaller developers.

 

Valve stopped supporting PS3 after orange box, they didnt like it!

 

They've never supported the PS3, EA took the PC version and ported it to the console. Valve have never been interested in doing it themselves simply because they're a PC developer. They've made it clear that the only reason the Xbox 360 is getting their games is because the port is so easy that they'd be stupid not to do it.

[Aimless]

Who's to say Microsoft would tie all franchises to the Xbox 360 exclusively? If they do buy EA (which i doubt they will, they were likely just expressing an interest) it'd make far more financial sense for them to retain all of these licenses by supporting Fifa, Madden, etc. on all platforms and just moving the majority of other games to the Xbox 360. This way they don't loose the valuable licenses and they still get to use EA's franchises to attract people to the Xbox and Games for Windows platforms.

Like I said, it would be cheaper for MS to pay for exclusivity on a case-by-case basis rather than spending billions of dollars buying the entirety of EA. Hell, it would be cheaper to buy the IP they wanted wholesale then forking out for one of the world's largest — but not, it should be mentioned, most profitable of late — videogame publishers.

 

And just in case anyone had any doubts:

There is no truth to this rumor, we have no plans to purchase EA.

[McPhee]

Like I said, it would be cheaper for MS to pay for exclusivity on a case-by-case basis rather than spending billions of dollars buying the entirety of EA. Hell, it would be cheaper to buy the IP they wanted wholesale then forking out for one of the world's largest — but not, it should be mentioned, most profitable of late — videogame publishers.

 

Not really, paying EA for exclusivity might not be all that beneficial in the long-term. It adds nothing of value to the company other than shifting a few more Xbox 360s.

 

As for the quote, it doesn't mean there isn't some truth in the story. Microsoft are always looking at buying up other companies to expand. In all likelihood it was talked about and they decided not to go down that route (for now). Stories like this don't usually appear out of thin air, but it doesn't mean there's much cance of a buyout either.

[Sooj]

EA are far too big to be bought outright, even by microsoft. They could probably afford it but it wouldn't make much business sense. I think microsoft will try and buy a number of EA shares at the very most but nothing too substantial.

 

I doubt anything will come of this.

[CoolFunkMan]

I doubt this'd happen, EA are far too huge to be bought out by anyone, plus they get more profits from multi-platform sales. It would be mental if it actually did happen though, and it wouldn't really bother me that much as I already have a 360.