Report: EA Seriously Considering Buyout
It’s not a state secret that Electronic Arts has been something of a wounded giant as of late. Since October, the company’s stock price has lost approximately 50% of its value, a stunning decline when you consider the company’s profile and stable of guaranteed-sales games. This decline might explain some of the company’s less scrutable moves, like the almost certain rushing of Mass Effect 3*. And it definitely reflects the muted performance of The Old Republic, into which EA reportedly sunk close to 300 million. Recent rumors – that the CEO John Riccitiello on the way to destruction, that the cofounders of BioWare have largely checked out, and that BioWare Austin is about to be rebranded ‘EA Austin’ – only add to the picture of a company struggling to maintain its dominance.
Of course, EA is famously one of the least communicative companies in the gaming industry but one could reasonably guess there’s probably a lot of panic behind the scenes. Which is why the report by the New York Post, that EA is “quietly” considering a buyout offer, sounds like truth:
lectronic Arts — the force behind such popular video games as “SimCity” and “Madden NFL” — is quietly exploring a sale, The Post has learned.
While the discussions are at an early stage, the gamemaker has been approached by private-equity giants KKR and Providence Equity Partners about a potential transaction, according to sources.
As the Post notes, EA has recently bought back shares from stockholders in an attempt to shore up their stock price. Their source claims that they would likely sale for what would amount to $20 dollars per share. Whether or not they’ll get that price is unknown, and EA has refused to comment on the story, but it’s clear that the company is unsettled by its near future prospects. Unfortunately, it doesn’t appear to be actively seeking to improve them, instead choosing to effectively ruin two of their best franchises in an effort to make them as broadly appealing as possible.
I’ve been saying privately that if BioWare still exists in anything like its current form in 5 years, I’ll be shocked. Perhaps I ought to expand that to include EA. We’ll keep you posted.
*To explain: while we can only speculate, my firm belief is that the original ending of Mass Effect 3 clearly uses half-finished assets and incompletely recorded dialogue. It’s especially obvious in the tunnel with all the dead people, and of course the identical, and vague to the point of incoherent ending cutscenes. If I had to guess, and I stress it’s only a guess, I’d say that EA freaked out over their stock decline and wary of another delay – remember Mass Effect had already been pushed back once – they ordered BioWare to wrap it up.