Electronic Arts Inc.

EA "Finally" Gives Up on Take Two

2008-08-19T03:49:47Z

After a long time, Electronic Arts admit defeat and has walked away. Initially EA offered to buy Take Two Interactive (makers of the GTA series) in February but got their offer turned down and thus continued to make hostile bids instead – something that isn't too nice business practice. Over and over Take Two kept turning down EA's offers due to thinking they undervalued them.

Throughout the process, EA often stressed the time sensitivity of its offer. "We've been pretty consistent about this from the start," EA corporate communications VP Jeff Brown told Gamasutra. "All along, we said that the model was dependent on getting their titles for distribution for Christmas this year."

"It is now clear we passed a threshold, and that's not going to happen. With that, it changes our economics and we are stepping away."

However, Brown says that Take-Two has offered EA its due diligence to review and discuss. "They've invited us in, and we're taking advantage of that opportunity," says Brown.

"We are hopeful that diligence will support the price of $25.74 [per share]," says Brown, though he declined to speculate on whether he expects the two companies to reach an acquisition agreement.

KotOR 3 - To be MMO!

2008-07-18T01:07:09Z

Portfolio.com is reporting that the next KotOR is to be an MMO. N.Evan Van Zelfden in Los Angeles warns, watch out World of Warcraft. In an interview at E3 this week, the CEO of Electronic Arts John Riccitiello said that 'EA is working on the next version of Star Wars game Knights of the Old Republic, and it will most certainly have a massively multiplayer online component to it'.

"We've got two of the most compelling MMOs in the industry in development," said Riccitiello. The first title, based on the Warhammer property, will launch soon. "And the one that people are dying for us to talk to them about -- in partnership with Lucas, coming out of BioWare, which is, I think, quite possibly the most anticipated game, full stop, for the industry at the point when we get closer to telling you about it."

Mr. Riccitiello also confirms the "oft rumored Knights of the Old Republic Online" by saying "Yes".

John continues to tell how important it is for any gaming company to enter the MMO scene and that it's essential for most of them. Furthermore he was interested in owning World of Warcraft and that it had been discussed – however it wasn't feasible; "Because [Vivendi] couldn't afford control of EA, and I wasn't giving it up."

"EA is firmly on that path now, with a KOTOR MMO, which would sidestep the consoles owned by Sony, Microsoft, and Nintendo. Increasingly, people are going to be talking about direct-to-customer in our business," said Riccitiello. "I think we'll be talking about it louder than most."

MMOs also help companies to expand within Asia and other regions, this is something Mr. Riccitiello is aiming for.

Read more at Portfolio.com.

$1 Billion Loan Commitment

2008-05-12T18:09:35Z

Electronic Arts has received a $1 billion loan commitment for their attempted acquisition of Take-Two.

EA indicated that it expected the cost of the merger to be approximately USD 2.1 billion, and that as of March 31 it had cash and equivalents in the amount of USD 2.3 billion.

Morgan Stanley Senior Funding Inc, Morgan Stanley Bank, BNP Paribas, BNP Paribas Securities Corp, The Bank of Nova Scotia and KeyBank National Association have made the commitment to provide EA with the additional USD 1 billion in financing at any time prior to January 9, 2009.

EA would be required to repay the loan, plus interest, within a year of the date the funds were initially borrowed or by August 9, 2009.

All obligations of EA under the facility are expected to be unconditionally guaranteed, on a senior unsecured basis, by Take-Two once it is wholly-owned by EA and by each other domestic subsidiary of the company.

Will EA raise its Take-Two offer?

2008-03-03T22:33:15Z

The story continues, will EA manage to acquire Take-Two or not?

Analysts offer mixed views on what is possible for EA, and acceptable for Take-Two

Analysts are mixed on whether or not Electronic Arts would consider raising its bid for Take-Two from USD 26 per share, and if it should or not.

Wedbush Morgan's Michael Pachter thinks that the company could walk away if Strauss Zelnick continues to scorn offers at near the current level.

"EA has no real choice other than to withdraw its bid if shareholders do not accept USD 26 per share," he said. "We think that the company may choose to offer a small increase, perhaps USD 1–2 per share more, in order to complete a friendly takeover.

"However, we don't see the company dramatically increasing its bid over the near term. In the absence of a hostile bid, we think that EA will cool its heels and walk."

And Screen Digest's Ed Barton told GamesIndustry.biz that the clock is ticking on the deal.

"An increase in the offer depends on whether it will convince Take-Two to conclude the transaction before either of the key events of greatest significance to the short term economic rationale of the deal: the release of GTA IV and the roster of sports games scheduled for release in the second half of this year from both EA Sports and 2K Sports," he said.

"EA has already said that its offer is predicated on distributing GTA IV and there is little doubt that it would prefer to avoid its annual price war with 2K Sports over the glut of sports titles aimed at the US market.

"Forcing EA to wait until after these two events materially changes the economic rationale of the deal and, presumably, removes much of the impetus to offer a substantial premium to Take-Two shareholders."

Meanwhile Cowan's Doug Creutz told Gamasutra that he things EA could go as high as USD 32 per share if pushed.

"We think that these [Take-Two] shareholders are likely to view an offer above USD 30 as too compelling to leave on the table, given the time value of money and the ability to lock in a significant gain on a company that has had historically volatile stock and financial performance," he said.

"We think EA can justify a bid of up to USD 32 even assuming that the top talent at Take-Two's Rockstar Games leaves the company…[but] it is most likely that Rockstar's top talent would remain with EA, given EA management's new decentralized approach to managing development, the greater financial and distribution resources available at EA, and the desire to continue working on Rockstar's key (and very lucrative) IP, Grand Theft Auto."

Take-Two's executive chairman Strauss Zelnick has stated that he will not open further negotiations on a possible deal until the day after the release of Grand Theft Auto IV on April 29.

EA's previous bids of USD 25 and USD 26 per share have so far been rejected.

EA to purchase BioWare and Pandemic Studios

2007-10-12T02:11:52Z

This is certainly an interesting turn of events. Gamasutra is reporting that Electronic Arts has reached an agreement with Elevation Partners acquire the parent company of BioWare and Pandemic Studios - VG Holding Corp.

Gamasutra wrote:

Electronic Arts has announced an agreement with Elevation Partners to acquire BioWare and Pandemic parent company VG Holding Corp for $620 million plus an additional $190 million in other charges, bringing the 800 employees of the companies under the EA Games wing.

You can read more about this acquisition by heading over to Gamasutra's breaking news.

And the press release:

REDWOOD CITY, Calif.--(BUSINESS WIRE)--Electronic Arts Inc. (NASDAQ:ERTS) today announced an agreement with Elevation Partners to acquire VG Holding Corp. -- the owner of both BioWare Corp. and Pandemic Studios. This acquisition gives EA a strong competitive position in key genres in interactive entertainment: action, adventure and role-playing games. The two studios have been recognized for creating some of the highest-quality games in the industry.

BioWare Corp. and Pandemic Studios have ten franchises under development, including six wholly owned games. BioWare Corp. is currently developing the highly anticipated Mass Effect, which will be published by Microsoft in November, and is in the early development stages of a massively multiplayer online game. Pandemic Studios is redefining open-world games with its upcoming Mercenaries 2: World in Flames™ and Saboteur™, in addition to several unannounced projects.

Pandemic Studios and BioWare Corp. employ roughly 800 people across four studios located in Edmonton, Canada; Los Angeles; Austin; and Brisbane, Australia.

“These are two of the most respected studios in the industry and I’m glad to be working with them again. They’ll make a strong contribution to our strategic growth initiatives on quality, online gaming and developing new intellectual properties,” said John Riccitiello, EA’s Chief Executive Officer. “We also expect this will drive long-term value for our shareholders.”

Pandemic Studios is led by Andrew Goldman, Josh Resnick and Greg Borrud. BioWare Corp. is jointly led by Greg Zeschuk and Ray Muzyka. These teams will join the EA™ Games Label run by Frank Gibeau, President of EA Games.

“Pandemic Studios remains focused on attracting the best talent and creating blockbuster action games,” said Josh Resnick, President and Co-founder of Pandemic Studios. “As a worldwide publishing leader, EA represents the ideal partner to bring our titles to market as global entertainment events.”

“We are truly excited by John Riccitiello’s new vision for EA,” said Ray Muzyka, Co-founder and CEO of BioWare Corp. “This vision is consistent with BioWare’s focus on crafting the highest quality story-driven games in the world. It will enable us to further the careers of the passionate, creative and hard working teams at BioWare Edmonton and BioWare Austin.”

EA will pay up to $620 million in cash to the stockholders of VG Holding Corp. and will issue up to an additional $155 million in equity to certain employees of VG Holding Corp., which will be subject to time-based or performance-based vesting criteria. EA will also assume outstanding VG Holding Corp. stock options. In addition, EA has agreed to lend VG Holding Corp. up to $35 million through the closing of the acquisition.

Transaction and Financial Information

The acquisition is subject to customary closing conditions, including regulatory approvals.
The transaction is expected to close in January 2008.
On a GAAP basis, the acquisition is expected to be dilutive to EA’s fiscal 2008 results by approximately $0.30 to $0.40 due to non-recurring acquisition-related charges, stock-based compensation and amortization of intangible assets. This amount is a preliminary estimate based on currently-available information and is subject to change.
On a non-GAAP basis, the acquisition is expected to be dilutive to EA’s fiscal 2008 fourth quarter results by approximately $0.05. This amount is a preliminary estimate based on currently-available information and is subject to change.

Acquisition Conference Call

Electronic Arts will host a conference call today at 2:00 pm Pacific Time / 5:00 pm Eastern Time to discuss the transaction. During the course of the call, Electronic Arts may also disclose material developments affecting its business and/or financial performance. Listeners may access the conference call live through a dial-in number at (877) 856-1956, access code 220497, or via webcast at http://investor.ea.com.

A dial-in replay of the conference call will be provided until October 18, 2007 at (719) 457-0820, access code 220497. A webcast archive of the conference call will be available for one year at http://investor.ea.com.

Second Quarter Conference Call

Electronic Arts Inc. will release its results for the second quarter of fiscal year 2008 after the close of market on Thursday, November 1, 2007. In conjunction with this release, Electronic Arts will host a conference call at 2:00 pm Pacific Time / 5:00 pm Eastern Time to review its results for the second fiscal quarter, discuss its outlook for the future, and may disclose other material developments affecting its business and/or financial performance. Listeners may access the conference call live through a dial-in number at (877) 723-9518, access code 220497, or via webcast at http://investor.ea.com.

A dial-in replay of the conference call will be provided until November 8, 2007 at (719) 457-0820, access code 220497. A webcast archive of the conference call will be available for one year at http://investor.ea.com.

About Electronic Arts

Electronic Arts Inc. (EA), headquartered in Redwood City, California, is the world's leading interactive entertainment software company. Founded in 1982, the company develops, publishes, and distributes interactive software worldwide for video game systems, personal computers, cellular handsets and the Internet. Electronic Arts markets its products under four brand names: EA SPORTSTM, EATM, EA SPORTS BIGTM and POGOTM. In fiscal 2007, EA posted revenue of $3.09 billion and had 24 titles that sold more than one million copies. EA's homepage and online game site is www.ea.com. More information about EA's products and full text of press releases can be found on the Internet at http://info.ea.com.

EA, EA SPORTS, EA SPORTS BIG and POGO are trademarks or registered trademarks of Electronic Arts Inc. in the U.S. and/or other countries. ™, ®, and Nintendo DS are trademarks of Nintendo.

About Pandemic Studios

With a long series of top-selling, critically acclaimed game releases, Pandemic Studios is a premier developer of console and PC entertainment. Over its nine year history, Pandemic Studios has established a reputation for producing award-winning, cutting-edge original content and enhancing the value of existing intellectual properties. Recent hits include sales-record setters Star Wars Battlefront™, Star Wars Battlefront™ II, and three original Pandemic-created IPs: Mercenaries™, Destroy All Humans™, and Full Spectrum Warrior™. In addition to the recently released Destroy All Humans® 2, Pandemic Studios is developing a number of new, original titles for next-generation platforms including Mercenaries 2: World in Flames™ and Saboteur™ at its Los Angeles and Brisbane studio locations. For more information on Pandemic Studios and its games, please visit http://www.pandemicstudios.com.

About BioWare

BioWare Corp. is an electronic entertainment company which develops computer, console, handheld and online video games focused on rich stories and memorable characters. Since 1995, BioWare has created some of the world's best-selling titles including the award-winning Baldur's Gate™ and Neverwinter Nights™ series, as well as the 2003 Game of the Year, Star Wars®: Knights of the Old Republic™. Original BioWare-created IPs include the 2005 RPG of the Year, Jade Empire™, with next-generation titles Mass Effect™ and Dragon Age™ currently in development. Mass Effect will ship to retailers throughout North America on November 20, 2007. The game has received more than 50 awards, including the 2007 Game Critics Awards for “Best Console Game” and “Best RPG” at the Electronic Entertainment Expo. With studios in Edmonton, Canada, and Austin, Texas, BioWare is also hard at work on a new title for the Nintendo DS™ based on Sonic the Hedgehog, as well as several unannounced projects including a massively multiplayer online game. For more information on BioWare, visit http://www.bioware.com.

BioWare, BioWare Corp., Mass Effect, Dragon Age and Jade Empire are trademarks or registered trademarks owned by BioWare Corp. in the U.S. and other countries.

CS Job Openings

2007-06-29T02:51:58Z

If you're interested in getting involved in the game industry, this may be your chance. EA has some openings in their Customer Service department.

Want to get your foot in the Game Industry door? We have a couple openings in the Customer Service department. If you're interested swing by the EA Jobs site linked below, click on the "Fairfax, VA" link at the bottom and look for the "Customer Service Rep" listing.

You can find the job opportunities page by clicking here.