Rumored: Electronic Arts For Sale

Is Electronic Arts For Sale? Experts Say Maybe.

Though the company itself states that it doesn’t comment on “rumor and speculation” when asked, “Is Electronics Arts for sale?” Some sources online state that Electronic Arts is indeed up for sale.

Claire Atkinson with the NY Post stated in her article that EA is “quietly exploring a sale” and that private equity firms KKR and Providence Equity Partners may be in discussion with EA. Perhaps because of a 37 percent drop in market value this year alone. Providence apparently also owns Bethesda, an independent game developer known for popular game titles such as Fallout New Vegas, The Elder Scrolls: Skyrim, Oblivion and the upcoming Dishonored.

In Claire’s article, a source familiar with EA, stated that “they’ve [EA] made it known they’d do a deal at $20 a share.”

Now here are a few bits in that article I don’t agree with:
“Like its rivals, 30-year-old EA has been challenged by the changes roiling the traditional gaming business. Sales of hardware consoles and software have slumped along with the rise in popularity of mobile and casual games that users can play for free online. Consumers are also buying fewer $60 games”
What is interesting, is that according to a recent Marketwatch article, analysts state:
“The culprit for diminished retail sales has been chalked up to several factors, including new multiplayer capabilities on the latest games that allow users to play popular titles like “Call of Duty” for hundreds of hours. The shift to new formats such as mobile and social games, though some analysts believe the latter’s effect has been exaggerated.”
Michael Pachter, an analyst from Wedbush Securities, mentions in the NY Post article that “the handheld casual console market has evaporated because of tablets.” He also states in the Marketwatch article that “the shift to digital has unfortunately taken on the meaning to most investors that ‘Call of Duty’ players are now playing Angry Birds, and that is just wrong.”

Now, considering what Michael said, how much of this is true? Have handheld console sales “evaporated” because of tablet or mobile gaming?  Have the Playstation Vita and the Nintendo 3DS truly been out-marketed by companies such as Zynga, Playdom or Playfish?

Personally, I don’t think that the two categories even compare. One can’t say that a market, which is based on free access and casual play, yet does not have the same depth or investment as a PC or console game, is damaging to the PC or console game industry.

That would be like saying the crossword puzzle or Sodoku game in the newspaper is out-performing board games like Connect Four or  Mouse Trap.

Do social media games and mobile games rake in the money? Sure, absolutely. Zynga is a shining example of stealing other people’s work and making boat loads of money off of them. But, would a gamer that enjoys The Sims 3 make an exclusive switch to games such as Zynga’s The Ville? I highly doubt it. If anything, that Sims 3 player would run both at the same time, if there’s time between the coffee drinking, bathroom visits and feeding your Sims.

Now, the Marketwatch article also mentions that multiplayer (MP) capabilities of games such as Call of Duty or Battlefield and that gamers aren’t buying other titles because of the longevity the MP option provides. I don’t know about you, but if my PC could multitask video games, I’d be on Battlefield 3, Minecraft and Sins of a Solar Empire Rebellion at the same time, provided I could handle it all. Just because I play a particular title online, doesn’t mean that I won’t go out and buy Dishonored, Borderlands 2 or Bioshock Infinite…

What do you think, is Electronic Arts for sale or is this a false alarm? Sound off on our comments section below. Thanks for reading.