Electronic Arts said Tuesday that it will acquire PopCap Games, the maker of such hits as "Peggle" and "Plants vs. Zombies," for a total of $750 million in cash and stock.
EA's purchase confirms an an earlier report by TechCrunch, although the paper's purchase price - over $1 billion - turned out not to be true. EA will pay $650 million in cash, plus $100 million in stock and earnouts.
EA said that PopCap had recorded over $100 million in revenue in 2010, growing at a 30 percent compound annual growth rate. About 80 percent of the company's revenue comes from smartphone, social, and casual PC platforms, in line with where EA wants to be, executives said.
"PopCap has proven they have the right people and creative culture to sustain this success," John Riccitiello, EA's chief executive, said in prepared remarks announcing the deal on Tuesday. "While other companies have built a business on just one hit, PopCap has made lightning strike five times with bankable, evergreen franchises: Bejeweled, Zuma, Peggle, Bookworm and Plants vs. Zombies. These franchises have demonstrated predictable revenues and strong growth on emerging platforms.
"And unlike other companies trapped on a single platform, PopCap IP has achieved success in crossing platforms to smartphones, tablets, PC and social networks," Riccitiello added.
PopCap said that it had 150 million games installed and played worldwide on game platforms like the iPad, Android phones and tablet, and oter platforms. ""We picked EA because they have recast their culture around making great digital games," said David Roberts, chief executive of PopCap, in a statement. "By working with EA, we'll scale our games and services to deliver more social, mobile, casual fun to an even bigger, global audience."
In May, EA announced a shift toward a digital model, away from a multitude of packaged games for retail to a smaller number of franchise that the company could develop across the Web, mobile, and social properties. Those strategies will include intellectual properties, such as the "EA Sports" and "Battlefield" franchises; platforms, including its own Nucleus registration system, which slightly less than doubled its membership from a year ago to 112 million consumers; and talent, with teams working across social, mobile, and console development, Riccitiello said at the time.
With PopCap, EA is acquiring the "proven leader" in casual games, Riccitiello said Tuesday. Today, about a quarter of the industry's revenue comes from mobile, social, and tablet and casual PCs; he said that EA expects that percentage to rise to above 50 percent in the next five years.
Both EA and PopCap were scheduled to appear at the GamesBeat conference in San Francisco, but pulled out unexpectedly - the reason, of course, was that they had signed their acquisition deal, said Dean Takahashi, an editor for VentureBeat, which hosted the show.
Additional reporting by Damon Poeter.
Source: http://us.rd.yahoo.com/dailynews/rss/videogames/*http%3A//news.yahoo.com/s/zd/20110712/tc_zd/266779
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