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.

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16 Comments on Report: EA Seriously Considering Buyout

R.J.

On August 16, 2012 at 12:55 pm

Given the state of EA’s stock over the last few months, this isn’t that surprising. A lot of times when a previously successful company struggles they’ll look for an infusion of new capital, even if it means being bought out. Maybe the lesson EA should take from this is that they should stop chasing Activision and Call of Duty. Maybe it’s time to make solid games that get good sales based on quality, instead of demanding sales of 5 million copies and making their games as generic as possible.

And I tend to agree that a lot of why the original ME3 ending was so bad is because EA put a final rush on things. It’s no secret that corporate fiscal years end in March, so EA likely wanted to have a big seller to make the year look better than it was. They rushed Dragon Age 2 in order to make sure it was out in March, too. I just can’t believe that something as incompetent as the original ME3 ending would have happened otherwise. Based on the Extended Cut, it still would not have been very good, but it at least wouldn’t have been as completely lazy as it once was.

SevenCell

On August 16, 2012 at 1:01 pm

I hope to God this is the end of EA as we know it.

William

On August 16, 2012 at 1:07 pm

Potential end to EA :)

Derek

On August 16, 2012 at 2:45 pm

In the last several years EA has taken shortcuts or rushed into production so many could-have-been great games, they deserve to vanish. EA seeks profits through shortcuts or charging for DLC, even when the DLC was developed before a game launch. It’s all a money making scam to EA.

There are plenty of developers and publishers who favor releasing quality products instead of just a cash cow, and they are the future.

Michael

On August 16, 2012 at 3:00 pm

LMAO.

Good stuff to hear. Wish it was true though. To be honest they probably will fake sell there company and rename themselves. Also Mass Effect 3 wasnt rushed a new team was put in just for the ending itself. Thats why everyone was pissed.

These big companies just want everything done fast and bring in the money. Thats Why Dragon age 2 failed, Mass Effect 3 failed and Star Wars Old Republic Failed(PVP) and now Dead Space 2 with Coop.

Dont they see the pattern?

Kevin

On August 16, 2012 at 4:20 pm

Let’s just remember something. As gamers, much as we hate it, we have a vested interest in seeing EA survive.

If EA went belly up, we would be looking at a second gaming crash. I happen to think we are due for one anyways, so what better way to start it than with the sacrificing of an evil corporation so we can be purged of our bad gaming habits? Yet I’m a minority, even amongst the hate EA crowd.

Guild Wars 2 better do gangbusters, otherwise it’s going to be near impossible to acquire financing for MMO’s in the future.

So hopefully once EA receives the Bain Capital treatment they can be purged of their dumber elements and focus on fewer things (hopefully they will also bury the hatchet with Valve, a move that has cost them dearly.)

Jack.In.Box

On August 16, 2012 at 4:52 pm

bye bye EA
after so many studios you destroyed, you deserve to sink, hopefully never to come back again

JC

On August 16, 2012 at 6:09 pm

EA doesn’t seem to understand their customers or the gaming community at all, I don’t think they even get that those two are one and the same.

It might be, for lack of a better word, cliche but they truly seem to be run by people that don’t have a clue about the industry they’re in. It’s like an accountant has veto over not just every game but every aspect of the games they make, as if management wants every game to check certain boxes like broad audience and others depending on the game type, while treating all their customers as a negative stereotype of the genre to the whatever game is currently on the table.

An easy example is how they ruin sequels, Dragon Age was a solid game by any standards and a success, so they then milked that success to churn out a sequel, dumbing it down for a broader audience (of what they perceive gamers to be). They don’t seem to understand that people have tastes where they love one thing and hate another, that when you dumb down a sequel in a misguided attempt to appeal to more people all you do is kill a franchise that had great potential in the long run if focused on its fan base.

EA is so big they could easily have maintained all the great franchises they own letting each successfully and faithfully cater to its own fanbase, developing loyal customers eager for the next release while focusing on each cornet of the market with specific products.

Instead they basically watered everything down which not only seriously disappoints the games fans but won’t bring in new fans, certainly not in the long term for the franchise. It’s almost as if they don’t see it’s impossible to water everything down making it appeal to everyone and have everyone buy every release rather than having focused franchises focusing on their own part of the market. It’s economically impossible for the consumers.

Then of course when they’ve failed to maintain any kind of loyal fan base they blame it on piracy and not only use that as a reason for anti-consumer DRM methods (online requirements, Origin etc) but even go as far as letting it influence the games themselves, another example of the “accountants” defining their games.

Just look at Command and Conquer going free to play, it’s not because they want to get on the free to play bandwagon, it’s because they think it will force people to buy it and prevent piracy. If they wanted something to release via F2P they could easily have created it but instead they take a long running franchise which has a fanbase (or at least some fanbase left after the things they’ve done), then they will have a huge ad campaign and many will cover it because it’s “C&C”. The problem is only the C&C fans really care about C&C and they won’t be impressed by outlandish changes, constant online requirements, pay-to-win micro-transactions. The value in the game EA releases is very poor in almost all cases.

Even all this is just the tip of the iceberg, everything about them has become anti customer, as far back as requiring internet access for LAN games then taking down the servers when they release a sequel trying to force customers to buy the new “version” of the game is they want even LAN support. Out of the masses of games from EA how many support modding or otherwise let the community create and expand the game rather than locking it down so they can control every addon while charging for it. People remember the company behind games who treat them well or badly. EA has had this attitude for so long their name is pretty much a taboo of sorts

Compare even just those points to something like The Elder Scrolls, it’s remained well focused on it’s fanbase, something which grows slowly and after almost 20 years is now huge. They’ve been customer friendly with it, no ridiculous DRM at least until using Steam which is at least the most accepted of such DRM mechanisms, letting the community add endless free content to the game adding value to it which customers remember when the sequel comes around. There simply is no incentive to buy something from EA because you know it’s a dash for money. There may be some passionate about making good games in EA somewhere but almost all of it gets filtered out but the bean counters and DRM paranoia.

EA doesn’t have a clue what it’s doing which sadly makes it a bane on the gaming industry due to its size and influence, as it frantically scratches around like a cat stuck in a bathtub trying to find its way out of its own hole.

Menthro

On August 16, 2012 at 8:00 pm

Honestly? Let ‘em burn. Even if it causes a “gaming crash” we can survive without them, and they will be a wonderful warning to other gaming companies in the future.

JawaEsteban

On August 16, 2012 at 11:49 pm

Yep. We don’t need no water, let the mother#@er burn.

Burn, you bastards.

Niserox

On August 17, 2012 at 1:40 am

RIP big boy.

You will NOT be missed.

psycros

On August 17, 2012 at 2:56 am

EA: keeping the Interplay tradition alive.

SXO

On August 17, 2012 at 6:18 am

@Kevin I’m sorry Kevin, but I just don’t see how EA’s survival is good for gaming as a whole. If they owned companies known for great games, that would be one thing, but all the formerly top quality devs they now own have been releasing sub-par games for quite some time now. Bioware has been tainted, DICE has been tainted, and the list goes on. I would much rather see a publisher like THQ survive so we can still see content from their devs such as Relic, but EA’s people are only focused on revenue now, and nothing more.

Dantes

On August 17, 2012 at 8:14 am

I seriously hope EA is on the way out. After all the harm they’ve done to many of my favorite IP’s, I’ll honestly be jumping in joy to see them go down.

@Kevin
We absolutely do not have a vested interest in keeping EA around. It may cause some ‘ripples in the pond’, but inevitably seeing EA go down would send a pretty big wake-up call (hopefully) to other devs out there who may be thinking about following in their footsteps. Ultimately I think it can only be good for gaming to have EA out of the picture.

Martin

On August 18, 2012 at 10:09 am

EA needs to die, and die fast. So do Activision and Ubisoft. These companies are ruining gaming as we know it.

Dave_Tech

On August 19, 2012 at 12:12 pm

Publisher+ Publicly traded Stock= The Death of creativity and freedom. $70 dollar video games have killed the Industry and eaten alive some of its greatest talent.