Electronic Arts Inc. to buy Playfish for $275 million
Electronic Arts Inc. agreed to acquire social-network games maker Playfish for at least $275 million as the videogame publisher looks to strengthen its position in the growing Internet and wireless gaming segment.
Playfish says it has more than 60 million active player accounts across its 10 game titles, which include games like “Pet Society” and “Restaurant City” that are used on platforms such as Facebook and MySpace. It will become part of EA’s interactive business, which includes its EA Mobile unit.
In addition to the cash at closing, EA has agreed to about $25 million in equity retention arrangements and Playfish’s former owners could get up to $100 million of additional cash if the company reaches certain milestones by the end of 2011. London-based Playfish is backed by Accel Partners, Index Ventures and Stanhope Capital.
EA, which releases quarterly results after markets close Monday, has been working hard to revamp its lineup after not scoring a profit in more than two years, well before the retail slump set in. Still, the company has released some much-needed hit videogame products, including the latest Sims installment and sports games for Nintendo Co.’s Wii platform.
Turnaround efforts have been complicated by the downturn in consumer spending, which analysts are saying may not recover in time for the holiday season. However, in August Chief Financial Officer Eric Brown said the company was expecting growth in the second half of this year, and strong growth of its digital services business.
