One of the biggest names in gaming, Electronic Arts (EA) has been going through some rough times recently, especially with the low numbers on one of the most expensive games ever made – Star Wars: The Old Republic. According to the New York Post, the publishing giant has been approached by a couple of equity firms for potential sale of the company, KKR and Providence Equity Partners. The talks between EA and the firms are still at an early stage.
One of the Post’s sources said, “It’s early days”. Another said that EA has made it known that it would do a deal at $20 a share. EA has suffered a 37 percent drop in its share prices this year, especially after the disappointing sales of Star Wars: The Old Republic.
Many companies have seen problems recently, especially because of the increased interest of gamers in social and casual games, made by companies such as Zynga. Another main reason for the dip in EA’s stock prices could also be that Star Wars: The Old Republic will be going free-to-play soon, less than a year after its release.
As of now, there has been no comment on the matter by either EA or the equity firms. So, this does not affect gamers in any way yet. It is interesting to note that Providence is also a major shareholder in Zenimax, which is the parent company of the makers of Elder Scrolls V: Skyrim, Bethesda.
Electronic Arts may be sold soon
Recently, there was news that EA is planning to bring gaming to Microsoft’s upcoming Windows Phone 8. According to Bloomberg, EA sees the next version of Windows as central to its handset strategy. “We’re working very closely with Microsoft to understand what their views on gaming navigation are,” Chief Operating Officer Peter Moore said in a phone interview with Bloomberg. “Anything that allows more platforms to be adopted quickly that have a gaming element is good for Electronic Arts”.
According to an earlier report, Electronic Arts expects revenue from digital downloads of its games to overtake sales of boxed game software within a few years, and is focussed on expanding its array of mobile and free-to-play products. EA and major rivals Activision Blizzard and Take-Two Interactive Software are struggling to sustain revenue growth as gamers migrate to casual and social games on the Internet and on mobile devices.
EA is hoping to use tablets and phones along with Internet-based titles to reduce Microsoft’s reliance on boxed products. Microsoft needs to have a strong developer base for Windows 8, so that it can go neck and neck against Google's Android and Apple's iOS.
“It is important to attract the gamers and due to Windows Phone 8’s relation to the classical Windows PC programs, it is a good platform for game developers,” said Robert Jakobsen, an analyst at Jyske Bank Denmark. “This is clearly a step forward for Microsoft’s mobile operation system”.