What you need to know
- Take-Two Interactive was looking to acquire U.K publisher Codemasters for $973 million.
- Now, Electronic Arts has reached an agreement to acquire Codemasters for $1.2 billion.
- The deal is expected to close sometime in early 2021.
Earlier this year, Take-Two Interactive announced it was leading the acquisition process for Codemasters, a U.K-based publisher and developer known for racing titles like the DiRT franchise. The terms of the agreement would've have Take-Two Interactive acquiring Codemasters for $973 million.
Now a new player, Electronic Arts (EA), has entered. EA announced that has reached an agreement to acquiring Codemasters for a price of $1.2 billion, at a rate of $7.98 per share. This is well above the price offered by Take-Two Interactive and this new deal is expected to close in the first quarter of calendar 2021.
EA believes that Codemasters is a good fit and that the combination will increase the success of both Codemaster's and EA's racing franchises. Codemasters will also benefit from EA's publishing and analytics teams.
"We believe there is a deeply compelling opportunity in bringing together Codemasters and Electronic Arts to create amazing and innovative new racing games for fans. Our industry is growing, the racing category is growing, and together we will be positioned to lead in a new era of racing entertainment," stated Andrew Wilson, CEO of EA. "We have admired Codemasters' creative talent and high-quality games for many years. With the full leverage of EA's technology, platform expertise, and global reach, this combination will allow us to grow our existing franchises and deliver more industry-defining racing experiences to a global fan base. We are pleased that both our Boards of Directors are recommending this transaction, and we look forward to welcoming such an exciting and talented team to the Electronic Arts family."
Major publishers are continuing to aggressively expand right now, with Microsoft acquiring ZeniMax Media for $7.5 billion, while Take-Two Interactive has bought studios like Ruffian Games, now branded Rockstar Dundee. For a time, AT&T was looking to sell the WB Games division, though this has been put aside at least for now.
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I'm hoping this doesn't ruin the future F1 games...
I still think the WB Games sale was stymied by the fact AT&T couldn't reconcile the fact that WB Games is only worth what it is worth because it has access to the WB IP. While there is a ton of talent there, the IP couldn't easily be sold. Unless AT&T is willing to sell Warner Media, the only option would be to allow a competitor like Xbox or Sony to "poach" their game developers and then to license the IP out to them.
Theoretically they can sell the studios (which own some IP of their own) bundled with a ten year license to the Warner IP but that could get unwieldy considering some of the IP is licensed from others. Then too, the studios are cash positive and ATT has free cash flow to keep them operating.
Most studios selling out are doing it because game development is getting expensive and with the emergence of subscription services it is only going to get harder for smaller studios with only a handful of franchises to survive.
And WB may stillget sold if the next DC games underperform...
I hope they are ready to make a failed Games as a Service game and get shut down.
This wouldn't be such an issue but every time this happens, the content instantly gets optimised for profit rather than quality and storyline. I miss gaming in the 80s/90s for the sheer fact people made games with far less focus on $$$$
In the 80's making a AAA PC/Console game only cost a couple million. Today the ante is in the mid to high 8 figures. One flop and it's bye-bye birdie.
That's why so many studios have gone to mobile.
And even that is getting cash hungry.
You need to spend money to make money but gaming is such big business you need to spend BIG money.
Expect more consolidation.
Great, F1 ultimate team nonsense inbound.
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