Electronic Arts aquires PopCap Games for $1.3 billion

By Posted 13 Jul 2011, 13:46

The video game publishers Electronic Arts, more commonly known for games like the FIFA and Madden franchises as well as the franchises Need for Speed and Battlefield, are looking to expand their company across other platforms it seems with their recent acquisition of casual games developer PopCap Games.

The American video game publishers PopCap Games, founded in 2000, is responsible for mini games, which are usually free, such as Plants vs. Zombies and Bejeweled. Their games can also be found online with websites like Facebook. Bejeweled is their flagship game and has sold over 50 million units across various platforms including the iPhone and iPad. If you haven’t heard of game Bejeweled before, check out the video review of Bejeweled 3 below. You can also download Bejeweled 2 from the iTunes store for your iOS.

In the past acquisitions from big companies have created mixed reactions. For instance when AOL bought Huffington Post the first wave of reactions was relatively positive. However AOL’s co-founder was said to be less than supportive with the buy due to their bad reputation when it comes to past acquisitions.

According to The Telegraph the deal, which is reported to cost around £817 million ($1.3 million) would see EA’s résumé become even more impressive than it already is, as it will bring with a significant improvement to their social aspect. The easy-to-play games that PopCap Games are known for also appeal to a broader audience, which would only benefit EA some more. The deal between the PopCap and Electronic Arts companies is due to close in August and EA say it will help them reach their $1 billion in revenue target from its digital business alone.

This could turn out to be a very smart strategic investment by EA as the demand for online and digital games is on the rise, with reducing numbers of gamers buying games on disc. This also gives them the platform for competing with Zynga, who are also very successful in developing these types of games. EA’s Chief financial officer Eric Brown says this gives them a ‘much stronger presence in social network games.’

Zynga, who are responsible for games like Zynga Poker, FrontierVille, FarmVille and CityVille, currently has over 270 million active monthly users playing their games on Facebook. The company is expected to be worth around $15-20 billion and recently went public to try to raise $1 billion. Will the PopCap-EA deal receive a positive or negative reaction?