By John Walker on July 12th, 2011 at 10:45 pm.
Further proof that you should believe every rumour you read comes with the non-shock news that EA have bought PopCap. Perhaps the real shock here is for how much: $750 million.
Man, Simon PopCap and family are rich tonight!
That’s three quarters of a billion dollars. An American billion, admittedly. But that’s still AN AWFUL LOT OF MONEY. I wish I’d invented PopCap now. I bet I could have. I would like to have $750 million please. Although of course that’ll be small change compared with when RPS finally gets bought up by some evil corporation and we all retire to private islands to race speedboats.
PopCap clearly makes sense as a thing to own. Their games aren’t just popular. They’re ubiquitous. In fact, to be over the age of 35 and not own at least two copies of Bejeweled is illegal in most American states. With sales numbers that make your eyes spin around inside your head (over 150 million of their games are being played, albeit an awful lot of them for free), they’re a company that does seem likely to be worth the extraordinary amount of money EA is paying. Which is $650m in cash (I love to imagine it’s literally in cash, backed up in trucks), and a further $100m in “Stock and Multi-year Earn-Out”, which I definitely don’t need to explain. (Even the New York Times seems to struggle to believe the figures from PopCap, accidentally printing their download figures as 1.5m – that wouldn’t even cover Zuma.)
EA bossman John Riccitiello said these words:
“EA and PopCap are a compelling combination. PopCap’s great studio talent and powerful IP add to EA’s momentum and accelerate our drive towards a $1 billion digital business. EA’s global studio and publishing network will help PopCap rapidly expand their business to more digital devices, more countries, and more channels.”
Meanwhile PopCap’s CEO, David Roberts, fought back saying:
“We picked EA because they have recast their culture around making great digital games. By working with EA, we’ll scale our games and services to deliver more social, mobile, casual fun to an even bigger, global audience.”
(At first glance I was sure he said they’d picked EA because they were racist. This is unlikely to be true.)
Another man called Eric Brown, with the title EA CFO, garbled some unintelligible nonsense:
“PopCap has a proven financial trajectory with sustained revenue growth and double-digit operating margins. On a non-GAAP basis, this deal is expected to be at least ten-cents accretive in fiscal year 2013.”
That may as well have been in Swedish. I think what he means is, “RICH! WE’RE GOING TO BE RICH!”
Not as rich as Mr and Mrs PopCap and their children, who on top of the three quarters of a billion dollars can look to get another $550 million by the end of 2013 should all go to plan. Basically, if PopCap grosses $343m or more, another half billion goes into the PopBank. For a grand total of $1.3bn. Flubberderflubberderflubber. PopCap currently employs 475 people worldwide, and here’s hoping they all see a chunk of change from this deal.
This should all go ahead in August this year, so long as no one with enough authority objects. If you understand money gobbledegook, you can read the whole lot on Business Wire.
So how do you feel about this? As PopCap sort of said, EA really has reinvented itself over the last few years, no longer appearing to be the Big Bad they once were perceived to be. Do you think PopCap are safe in their hands? And when will the next Bookworm Adventure come out?
(Rumours that EA made the decision to buy after downloading a free version of PopCap and owning it for an hour are made up by me for this joke.)
12/07/2011 at 22:51 Ricc says:
I like to think EA bought Popcap, because they want Jeff Green back.
12/07/2011 at 22:58 jonfitt says:
You can check out, but you can’t leave.
13/07/2011 at 08:57 MrMud says:
poor black dragon
13/07/2011 at 14:00 Kadayi says:
EA want that ‘Cudgel of Xanthor’ licence.
12/07/2011 at 22:51 Meat Circus says:
I hope Ode to Joy played when they signed the paperwork.
12/07/2011 at 22:51 Rirse says:
Guess this means no more fun promos with Steam from Popcap and instead all their games being removed from Steam in favor of Origin only. Lame
13/07/2011 at 19:40 Nielk1 says:
Ahhhhhhhh, sh*t… I should have gotten the PopCap Complete Pack this Summer Camp sale. I don’t see EA EVER letting it go on that big of a sale again.
12/07/2011 at 22:53 Chakawi says:
I’m really saddened by this, I really liked that Popcap was “independent” in a sense. But w-e I don’t think it’ll have much effect to their games. I still have stuff like Hellgate London haunting me so…
13/07/2011 at 20:21 Synesthesia says:
yeah, i bet they’re crying into their pillows right now.
12/07/2011 at 22:53 Spinks says:
I guess no more plants vs zombies in future WoW expansions then :)
12/07/2011 at 22:58 jonfitt says:
Grab any Popcap games you want now, before they disappear to Origin!
12/07/2011 at 23:02 jonfitt says:
But yay for PopCap for making an obscene amount of money. Let’s just hope it works out well for them. More like Blizzard and less like Origin, Bullfrog, Westwood, etc.
13/07/2011 at 01:27 Shuck says:
In other words, let’s hope they’re like the company not bought by EA rather than the companies that were bought up by EA? There’s a reason why EA has a reputation for buying up developers and destroying them. Oh well, there’s always a first time for everything.
13/07/2011 at 01:31 Rii says:
To be fair that was a long time ago…
13/07/2011 at 15:44 jonfitt says:
But also to be fair, they did destroy some of the greats of my youth.
13/07/2011 at 18:23 Shuck says:
@ Rii: To be fair, it’s not as if EA has stopped buying up and destroying developers either.
12/07/2011 at 22:58 MasterBoo says:
http://fastcache.gawkerassets.com/assets/images/9/2011/07/xlarge_zombiea.jpg
12/07/2011 at 23:00 McDan says:
Sweet Jesus. A potential $1.3 billion between 457 people? Obviously it won’t be split evenly, but that’s mad money.
12/07/2011 at 23:09 Edgar the Peaceful says:
Jeez Louise, indeed.
12/07/2011 at 23:34 squareking says:
…indeez?
13/07/2011 at 00:46 abremms says:
sad thing is it is unlikely that the rank and file will see a dime unless they hold stock. the money will be split between executives and stockholders while the majority of the people who actually do the work will be rewarded with the enviable opportunity to stay on and work for the New Management!
maybe i’m just jaded though.
13/07/2011 at 01:28 Shuck says:
@ abremms: I guess I’m really cynical, as my reaction was that they’re more likely to be laid off than reap any rewards in a situation like this.
13/07/2011 at 08:58 ThinkAndGrowWitcher says:
> “while the majority of the people who actually do the work…”
No doubt said by someone who’s never grafted to set up their own company. For better or worse (and yes, there are an 8x combo of both) we’re not living in a commune. What about all the customers? – should they pay them too for doing all the playing to pay for all the working?
Sorry, but this entitlement mentality rubs my gold coins up the wrong way. And that’s not to say it’s not a good idea to reward your employees with bonuses: it is.
13/07/2011 at 11:42 Jumwa says:
Yes, obviously starting up a company is worth thousands of times more the effort of the entire several-hundred-person work force. What a glorious age of anti-human corporatism we live in.
13/07/2011 at 16:08 ThinkAndGrowWitcher says:
I graciously bow down to the distorted-thinking twerp above.
15/07/2011 at 21:36 arccos says:
@abremms: And by the same token, the employees getting a paycheck week to week should give back their earnings when a company fails, right? If you want to invest in a company, invest in a company. But don’t complain when you don’t get a slice of the rewards without a slice of the risk.
12/07/2011 at 23:02 karry says:
So…750 million Canadian dollars, huh…how much is that in euros ?
13/07/2011 at 01:35 Heliocentric says:
54
13/07/2011 at 09:02 ThinkAndGrowWitcher says:
These days, the formula for Canadian-dollars-to-Euros is to double it for US dollars, and then divide it by Greece.
12/07/2011 at 23:05 General Ludd says:
As an auditor: Non-GAAP = Non-”Generally Accepted Accounting Principles” = Make up your own profit.
12/07/2011 at 23:05 Carra says:
That’s a lot of Peggles.
12/07/2011 at 23:11 kalidanthepalidan says:
Assuming we have our own speedboat are we welcome to participate?
12/07/2011 at 23:15 Poet says:
John I hope you know that because of recent departures from RPS you are contract bound to keep writing here for at least another year. I’m sure all the other Lawyers/Barristers here will concur.
12/07/2011 at 23:19 ZIGS says:
Makes you wonder, how much is Valve worth?
13/07/2011 at 00:14 Urthman says:
John Walker tells the story of asking Gabe Newell about the possibility of a buyout deal between Microsoft and Valve.
Newell said, “No, I’m not interested in buying Microsoft.”
13/07/2011 at 00:22 CMaster says:
An article went around the net a whle back saying they were probably worth at least $1 billion.
The thing is though, as a private company that has never published financials and has never sold any stake in it, it’s impossible to really know.
Of course, nobody would have valued PopCap at anything like this much based off their financials alone, so..
13/07/2011 at 06:35 Bret says:
A journalist asked Gabe Newell that once.
He was fed to the landsharks.
13/07/2011 at 11:09 Fierce says:
You know why I’m glad Valve doesn’t go public CMaster? Because they’d go the way of Facebook.
They’d be grossly overvalued by the market -despite having more claim to “deserving it” than Facebook-, their stockholders will through inertia alone demand ever higher ROI, Valve would change irrecoverably in their attempt to satisfy their demands perhaps by released Half Life 3 early and of DNF-like quality, lose what made them special, and ultimately be abandoned by all but their die-hards (who actually are an impressive number) while the market re-evaluates their stock price downward when they realize the honeymoon is over.
Yeah, I’ll have some Stay Private, with a side of Never Change, Valve. Cheers.
13/07/2011 at 11:32 marach says:
It would probably be floated for about 1 billion as “valve” or about 6 billion if they renamed themselves “steam” seriously most people don’t associate steam as being just the name of the downloader they believe it’s the company name…
13/07/2011 at 15:53 CMaster says:
Where did I suggest it would be a good idea for Valve to float publicly?
From the point of view of gamers, it would definitely be a bad thing, and make me a lot less comfortable about the nature of Steam and it’s subscriber agreement.
13/07/2011 at 16:37 Fierce says:
In order to valuate them. Or see their finances. I dunno, it was in there somewhere. In drowsy 4am-o-vision.
12/07/2011 at 23:20 Malawi Frontier Guard says:
“PopCap has a proven financial trajectory with sustained revenue growth and double-digit operating margins. On a non-GAAP basis, this deal is expected to be at least ten-cents accretive in fiscal year 2013.”
Oh John, you write satire so well… wait.
12/07/2011 at 23:25 DaFishes says:
Twitter was alive today with game company employees saying to each other, “Now I can talk to you on the EA intra-company communicator!”
12/07/2011 at 23:29 Raziel_aXd says:
I wonder when will EA offer to buy RPS.
12/07/2011 at 23:29 Nicholas Totton says:
I knew it! Jeff Green was a spy EA sent in!
13/07/2011 at 00:49 Kadayi says:
I doubt Jeff Green will be too chuffed about this all given he was clearly unhappy with hows things worked out at EA after he moved off the Sims team.
12/07/2011 at 23:31 Jac says:
That’s an absolutely ridiculous amount to pay for a company they expect will make 33.2m net profit in “fiscal 2013″.
13/07/2011 at 00:03 JFS says:
I wonder, where does all that EA money come from? They could probably buy Greece for it at the moment, and have a nice swim there, but instead they shell it all out for a small company that will never be able to redeem itself with the above mentioned profit. How so?
13/07/2011 at 00:11 TillEulenspiegel says:
I was going to suggest that such things are often paid mostly with stock, but no, it’s mostly ($650m) cold hard cash. Holy moly. That’s nearly every penny of EA’s net income for FY 2010.
13/07/2011 at 00:14 Wisq says:
I would assume that …
… a) so long as PopCap remains as profitable as they are, EA always has the option to sell them to someone else later for a profit,
… b) EA thinks they can make PopCap even more profitable by throwing their own marketing and clout behind them, and
… c) PopCap can act as a talent pool and EA can scoop up the best performers and make the rest of their operations more profitable.
Business buyouts just seem to be like that… you pay a ton for a company that would take a decade or more to pay that money back in profits, but you gain a ton of intangibles as well, and there’s always the possibility of grabbing their best parts and offloading them later if needed.
13/07/2011 at 01:51 Mistabashi says:
I’m also guessing that a company like Popcap with an already quite large catalogue and the ability to pump-out games pretty quickly is going to add a lot of value to a new digital download service (eg Origin).
This is probably just a part of EA’s plans for the next decade, they want a slice of that juicy casual market along with their own distribution platform and possibly pushing further into other areas like iphone / android apps etc.
Microsoft seem to have plans to merge GFWL with XBLA in Windows 8, Impulse got bought-up by Gamestop and we’ve yet to see anything big happen there but it probably will – seems like the winds of change are blowing and a lot of big companies are trying to stake-out their space in the market in the coming years.
(I don’t like change, usually it’s shit).
13/07/2011 at 07:09 sinister agent says:
I think bashi has it nailed here, to be honest. This is bound to tie in with EA’s downloadery gubbins more than anything.
13/07/2011 at 11:34 marach says:
How much would you pay for say AMD? their net profit under GAAP is non existant (their non-GAAP is fairly healthy).
13/07/2011 at 11:49 sinister agent says:
I’d offer them a tenner and my old shoes. Might haggle up a bit, obviously.
12/07/2011 at 23:38 DemonClaw says:
though ton of money for popcap to swim in, this is a bad thing.. now future games if not very soon games will be on Origin only and not on steam, cost 10% more, EA marketing get their slimey hands on future titles and EA with milk franchises to death.. sigh
12/07/2011 at 23:40 nubbuka says:
I suddenly am in the mode to invest in “PopBank”, sounds like an interesting name and hey,
we do like our names, don’t we?
12/07/2011 at 23:54 Rinox says:
Even if I won Euromillions tonight (which I doubt), I still won’t be anywhere near as rich as Simon Popcap now.
13/07/2011 at 00:02 Navagon says:
And just when do they expect to see a return on this investment? Some time next century?
13/07/2011 at 00:04 Zogtee says:
Let’s see how long it will be before Popcap games become Origin exclusives, then. Or just available from everywhere except Steam.
13/07/2011 at 00:06 MrTambourineMan says:
Fuck EA(I’m drunk).
13/07/2011 at 00:13 Randdalf says:
Tiger Woods Peggle Tour 2012, just one of the new games you can expect from Popcap this year!
13/07/2011 at 00:18 Anton says:
“Plants vs. Zombies 2″ will be a 1st person shooter =P
13/07/2011 at 00:41 And says:
A Plants vs. Zombies first-person shooter would actually be kind of awesome.
Imagine running through a candy-colored suburbia hurling peas and melons at the zombie bobsled team. Or maybe being like an engineer in TF2 with a rake instead of a wrench, cultivating your garden of doom in between fending off the zombie waves.
13/07/2011 at 00:50 abremms says:
like Sanctum only you run around grabbing sunlight and planting flowers and bashing zombies with rakes!
YES DO THIS NOW
13/07/2011 at 00:42 Raiyan 1.0 says:
PopCap is worth five F-35B fighters.
It’s always more exciting to count in the currency of jet fighters. Especially expensive, inept ones.
13/07/2011 at 00:47 CMaster says:
I remember when I discovered on a school trip once, that a single missile from a Tornado GR1 (which the RAF fired into the ground, rather than let get “out of date” several times a month) cost more than it took to run my 700 student school for a year. It seemed mad.
13/07/2011 at 00:44 vodkarn says:
Hope you’re all excited for Plants vs. Zombies 2, which will be FTP, come with 3 plants, but you can buy the “EXTRA PLANT DLC!” for only 15 dollars!
13/07/2011 at 00:44 itsallcrap says:
Simon? SIMON?!
Ian Popcap. Don’t mess with the formula.
13/07/2011 at 01:12 slpk says:
I predict a crappy Plants vs. Zombies 2.
13/07/2011 at 01:20 Rii says:
Microsoft paid $470m (adjusted) for Rare back in the day; I recall hearing that that was the most expensive developer acquisition to date at the time. No doubt there have been other record-setting acquisitions over the last decade also, but is this a new one?
13/07/2011 at 02:28 Khann says:
Pretty sure Activision bought Blizzard for somewhere in the billions.
Sorry, can’t remember too well.
13/07/2011 at 22:37 Dances to Podcasts says:
Vivendi bought Activision. I believe the amount involved was a ‘metric fuckton’.
13/07/2011 at 01:53 ethicks says:
popcap is worth it. They make games that are beyond addictive and EA will profit down the line if they don’t mess with how popcap works.
13/07/2011 at 03:15 kickme22 says:
It seems to me that EA is going for a takeover of the market. First they buy Firemint games (the makers of Real Racing and Flight Control) now they buy Popcap. Next they make all those games require origin, and incorporate them into their current games (PvZ dlc for bf3 anyone?) And combine others (iPod version of Need for Speed will really just be a renamed Real Racing 2 )
13/07/2011 at 03:59 JohnnyMaverik says:
EA are still bastards IMO. Hopefully they’ll just let PopCap do their thing, but I wouldn’t be surprised if they cock it up a bit.
13/07/2011 at 05:20 Spacewalk says:
They could have got more.
13/07/2011 at 06:11 mollemannen says:
someone said they bought canada instead.
13/07/2011 at 06:30 Joe Duck says:
Popcap will bring them a mountain of casual gamers that will micropay like crazy. They will be much better placed in the super casual market than Acvision or Ubi. And you can be sure that they will make a strong “PopCap inFacebook” push. It is a lot of money, yes, but i is not an idiot buy.
13/07/2011 at 06:30 Yosharian says:
Am I the only one who thinks this is a bad idea? Look at what happened to Bioware; I know they make different types of games, but even so.
13/07/2011 at 08:05 UnravThreads says:
BioWare are shit of their own accord. I don’t believe for a second that EA are stood in BioWare’s offices going “Do this. More casual. More lolwtfgraphics. More DLC!”. The crap that comes out of the mouths of its employees (Awesome Button!) is not EA using BioWare as puppets, it’s BioWare themselves. I do think they’ll have some influence, but if that guy from EA DICE (I think?) is to be believed, then EA don’t interfere as much as people say they do. Project Ten Dollar is clearly an EA thing, but as a PC gamer, I seem to benefit from it quite well so no problems here.
As for this buyout, I think it’s… Possibly good, but possibly bad. PopCap have done extremely well on their own, but EA has always struggled to get into the casual market on their own. Yes, The Sims is a very popular franchise, but they need to branch out a lot more. They’ve got some licensed iOS titles, such as Risk, that are well made, but if they can get PopCap’s expertise, then they can really begin to get a good footing in the casual market. I’m going to be interested in how this plays out.
13/07/2011 at 08:21 RDG says:
Bah tenfold.
This means any or all of the following:
- Plants vs Zombies franchise will now include Plants vs Zombies:House Party, Plants vs Zombies:Medieval and many more for only €60 per expansion.
- Origin doesn’t sell any non-EA games, so the trick here is to buy all the other developers in the world in order to sell them.
- Popcap will now join the famous ranks of Maxis, Westwood, Bullfrog and Origin (I see what you did there EA).
13/07/2011 at 19:19 UnravThreads says:
Maxis are still around, though.
13/07/2011 at 09:08 Tei says:
I don’t know if this is a good thing. Popcap make excellent games, so good that sells to people that is not his original public. Popcap seems to make casual games that everybody loves.
EA plan seems to produce average games, and sell a fuckton by investing a mini-fuckton in advertising. The more money invested in advertising, the more profit (with some dimishing returns beyond some natural limit ).
Has a gamer, I have a interest in quality. But EA has not place for quality in his strategy. Quality can’t be planed or buy, It need to be crafter with extremely care. Money can buy “production values”. Animations are smoother, models have more polygons, the engine is refined. Theres one huge problem with money, and is that money is coward, …. is absolutelly scared of innovation, creativity, inventation. Something that is new, can’t be planed, so can be x20, x100 times more expensive than initially planned. It can’t be properly scheduled or measure. New “franchises” don’t have followers. Innovating is bad. Creating is bad. Originality is bad. On the other hand, is easy to plan for “production values”. Is easy to hire modelers by hour, or to use a existing engine that is better than a self-made one.
So EA will put more focus on production value, and ignore quality. Will combat innovation and have a anti-originality war. And invest more money in advertisers than programmers.
This may produce less good games, but more money.
I have this right?
13/07/2011 at 09:16 Arcturan Megadonkey says:
@abremms I hope you’re right: http://www.businessweek.com/magazine/content/11_27/b4235038625596.htm
13/07/2011 at 10:21 mouton says:
I switched from this article to BBC and that’s what I read there:
“EA unveils fisheries reform plans”
wat
13/07/2011 at 11:38 Drake Sigar says:
Given how many famous developers EA have sucked dry and left for dead , I’m a little concerned. At the very least this will probably mean shoving regional timelocks and intrusive anti-piracy software onto future PopCap games.
13/07/2011 at 12:03 mouton says:
EA isn’t really in the “intrusive anti-piracy” region anymore.
13/07/2011 at 16:49 Ultra-Humanite says:
“As PopCap sort of said, EA really has reinvented itself over the last few years, no longer appearing to be the Big Bad they once were perceived to be.”
When did this happen? What year is it?
13/07/2011 at 19:45 Nielk1 says:
Didn’t EA eat like 7 other developers in the past 2 years, firing most of the employees they acquired and begin milking the IPs to death?
13/07/2011 at 19:43 Nielk1 says:
Oh boy, how long till the Origin Exclusive Plants vs Zombies 8: The Wrath of the Tulips?