Tag Archives: Popcap

EA Buys PopCap to Fight Off Zynga

Today, Electronic Arts announced that it was acquiring PopCap Games for $750 million in cash and stock, plus up to $550 million in earnouts over the next couple years contingent on some revenue targets. Rumors of the acquisition started last month, after a report by Techcrunch.

PopCap was started eleven years ago, and is now of of the biggest creators of social games like Bejeweled, Plants vs Zombies, Baking Life and Zuma Blitz with nearly 17.5 million monthly active users.

EA Acquires PopCap Games

This isn’t EA’s first acquisition in the social gaming space. It acquired Playfish in 2009 for nearly $300 million and has subsequently been able to become one of the biggest names in social gaming with more than 30 million monthly active users.

With the PopCap acquisition, EA would become the number two social game company in terms of users, with over close to 50 million users, second only to Zynga, which has more than 275 million.

EA is still far behind Zynga, but with too much competition, acquisitions like these are the only way to grow fast in this exploding space of social gaming. Zynga is expected to raise close to $1 billion in the coming months, via the IPO route. Activision, EA’s closest competitor, may also be planning to snatch a few social gaming companies in the future.

EA to Buy PopCap Games for Over $1 Billion

EA may be in talks with PopCap Games, the creator of popular games like Bejeweled and Plants vs Zombies about a possible acquisition. A report by Techcrunch suggests that EA may be planning to buy PopCap for a sum over $1 billion.

PopCap has raised just about $22.5 million in funding so far, so it would obviously mean a huge payoff for its investors and founders. With PopCap’s revenues hovering around the $100 million mark, the acquisition figure is at a 10x revenue multiple.

EA acquired Playfish in 2009 for around $400 million, but is still trying to become the dominant player in the mobile and social gaming space. With the PopCap acquisition, EA might just manage to do that. Other major players in the space include Zynga and Rovio Mobile.

With the acquisition, EA may be able to boost its games portfolio to rival that of Zynga’s.

The deal is expected to close in a day or two. We will keep you updated.