EA Buys Playfish For $300 Million, Plus a $100 Million Earnout | Hacker News Reader

EA Buys Playfish For $300 Million, Plus a $100 Million Earnout

techcrunch.com

26 pointstransburgh15 comments

Last year at a presentation at the Founder’s Forum in Hampshire, England, CEO Kristian Segerstrale put up a slide with a dinosaur and expressed his desire to “kill EA.” Now he’s joining them instead.

I love the idea of terrifying your potential buyers into an acquisition rather than wooing them on bended knee. We need more of that.

Kind of like Mint/Intuit?

That's pretty typical. Startups get bought out because they start taking market shares away from the 8lb gorilla. If they're wooing them, there's really something wrong there and they should start thinking real hard how to compete and gain market share against the gorilla rather than the former.

Agreed, on face value it seems a bit nuts to openly announce you're targeting a megacorp like EA. However, Playfish is a tiny company. If they're getting bought out for ~300 Mil I doubt their revenue is much more than 1/10th that, probably maxing at 60 Mil.

Before Playfish announced they're targeting EA's consumers, EA likely didn't think twice about the puny company. Playfish's annual revenue is likely a drop in the ocean to a company making 4.2 billion in annual revenues. Playfish's announcement likely got EA to investigate the company and see that they're making consistent profits and might be a worthy investment.

Football and Soccer players don't hound down the team they want to play for, they get in wherever they can show that they're a major threat to the team they want and then say "make it worth my while!"

I don't want to make too much of the typo, but Playfish really is a horde of 8lb. gorillas.

EA did spurn off an unit named 8lb gorilla to make iPhone games.

http://www.joystiq.com/2009/07/11/ea-quietly-opens-8lb-goril...

Oops. Thanks for the correction.

I'm a bit surprised that EA didn't try to simply just win this market over themselves. With their stable of franchises it seems like it would be a feat they could have achieved. They even already have a casual focused online site, Pogo.com. I expected them to try to retool a team from that group into doing just Facebook games, but it seems like they didn't really even attempt it. I suppose they felt they just didn't have enough man power.

Retooling a team to go from programming real games in real languages to making a flash game is a rather absurd prospect. Are they really going to convince people to leave teams working in their Sports division, or get anyone to leave one of their major franchises with real experience?

If I was working on a new Medal of Honour or Battlefield, or even The Sims, you'd have to shoot me in both kneecaps before I'd consider taking my name off a game that could boost my career.

All you're going to get to make these games are either raw flash kiddies, or you have to take over a company with experience in making money on flash games. IMO I'm not surprised one bit, buying a company like Playfish was EA's only move to make.

That's why I said retool a group from Pogo.com. If you look at that site it's pretty clear that EA's had folks working on casual flash games for ages. It would not be a difficult move over to get folks from that group working on Facebook apps.

There is a difference between casual games and social games though, and it is the social know-how that EA is buying.

It wouldn't be difficult, but I don't think EA really understands the distribution side of social games.

Getting that right, IMO, is both harder and more important than having games with high production quality.

EA doesn't understand social distribution, or at least they haven't been able to execute on it.

Pogo has what, 10MM pageviews per month? Playfish has games with more monthly players than that.

Also, the winners in social gaming don't require EA's strengths, which revolve around branding and production quality.

They would properly make more by jumping ahead of the game and starting to earn 75 million/year.

And they would no doubt be using Playfish's top minds to tailor all EA franchises for social/casual gaming.

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