United States video game Company, Electronic Arts (EA) purchased the PopCap Games in a deal price of USD 1.3 billion. This is done to improve the quality of the EA game and compete with Zynga Inc."We have paid USD 650 million in cash and USD 100 million in the form of shares of the creator of the popular video game, Bejeweled and Plants vs. Zombies. The remaining amount of EUR 550 million will be provided if PopCap hit a target specified in the two years period, "says the EA.
EA investments on the sale of video games for game consoles are less, because EA games now offer the option to users to play games for free or low-cost mobile phone device, PC and Facebook.
"The deal will help EA to compete with Zynga. It also gives you the power of social networking game, "said Chief Financial Officer of EA, Eric Brown, quoted Reuters, Wednesday (1/7/2011).
As known on 1 July, Zynga has submitted to the governing regulation to IPO worth USD 1 billion.
Stocks had fallen when the EA announcement investors reject EA shifts towards a digital game, which makes smaller earnings from the game package. EA had also acquired Playfish in 2009 with a deal worth USD 400 million, which is a major purchase, "said Todd Mitchell.
But at least there's one shareholder who is satisfied with the accord and said that once the Zynga go public, then the stock will go up again and the EA can pay the rest deal with PopCap.
"After Zynga go public, it will look like a bargain in this century. Apart from Zynga, Ea will be the only way for investors to the phenomenon of game play off the “Larry Haverty managers of Gabelli Global Multimedia Trust and the owner of the shares of EA said.
"PopCap will help the company achieve a target of USD 1 billion in revenues from the digital business. This transaction is expected to be finished in August, "said EA CEO John Riccitiello.
PopCap, based in Seattle, has been profitable for the past 10 years since its inception. During the year 2010 PopCap is already generating revenue of USD 100 million. This can facilitate EA deal to make games for various platforms such as Facebook, RenRen, Google Android, Apple iPhone and iPad.
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