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June 23, 2011

EA in Talks to Acquire PopCap Games for at Least $1 Billion: Report

By Beecher Tuttle, TMCnet Contributor

Video game giant Electronic Arts is said to be in “late stage” acquisition talks with PopCap (News - Alert), maker of several iconic mobile device, desktop and console-based games, according to TechCrunch.

Multiple sources have told the AOL-owned site that the price tag (News - Alert) may exceed $1 billion, which would represent around 13 percent of EA's $7.49 billion market cap. The estimated acquisition figure would also be around 10 times that of PopCap's annual revenues, which are said to be around $100 million.

TechCrunch's sources have compared EA's acquisition bid to a “Hail Mary” pass in an effort to further solidify itself as a player in the thriving mobile and social gaming space. Electronic Arts purchased mobile game studio Firemint in May and “Cut the Rope” developers Chillingo last October. The creators of the highly popular “Madden” football series also acquired social network game developer PlayFish in 2009, says USA Today.

Electronic Arts has had issues breaking into the mobile gaming space because most of their titles are oriented to hardcore gamers, who spend the majority of their time on consoles like the PlayStation 3 and the Xbox. Top PopCap titles like “Plants vs. Zombies” and “Bejeweled” could help EA develop more market share in the casual mobile gaming world, TechCrunch speculates.

PopCap and Electronic Arts have an interesting history. The founders of the Seattle-based developer started their career at Pogo, which was acquired by EA soon after they left to launch PopCap.

Not long after, PopCap tried to sell its now-iconic Bejeweled game to EA for just $60,000, PopCap CEO John Vechey (News - Alert) admitted to PC Gamer last year. “They said no, thank goodness!” said Vechey.

PopCap now has an international workforce of more than 400 employees and a stable of highly successful gaming franchises. Rumors have been circulating that PopCap is considering going public later this year.

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Beecher Tuttle is a TMCnet contributor. He has extensive experience writing and editing for print publications and online news websites. He has specialized in a variety of industries, including health care technology, politics and education. To read more of his articles, please visit his columnist page.

Edited by Jennifer Russell

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