EA on PopCap acquisition: 'Don't break it'

By Andrew Yoon, Jul 12, 2011 3:40pm PDT

There are always concerns when a large company--especially one as large as EA--absorbs a beloved independent game developer. PopCap is by no means small fish--its $750 million price tag is evidence enough. However, some are wondering if being part of the EA empire will somehow change PopCap for the worse. EA CEO John Riccitiello addressed the concern at an investors' conference call.

"It's already a rapidly expanding, margin-expanding business before we got there," Riccitiello said. "So on one level, don't break it."

PopCap currently employs about 450 people, and will benefit from joining a large corporation like EA, Riccitiello promises. "Some of their most important designers and creators and producers are stuck to perpetually work on language localization, individual handset adaptations, individual carrier adaptations. It's a lot of work... It's very unproductive work for great designers." EA's global operation affords PopCap to work on creating games, not necessarily porting them. "We have teams in places like Romania and India to do that work for EA's creative organizations so that creators can create. The issue is... sometimes there are a number of big revenue opportunities inside of PopCap, but they don't realize anywhere near as quickly as they could because they're servicing existing needs to push code for the next 25 handsets for Android. EA taking that up to low-cost locations frees them to realize against that opportunity."

The acquisition of PopCap will not only add revenue to EA, it will significantly impact their reach in the growing mobile and social space, and expand the reach of EA's other mobile and social games. "There are strong network effects... Just like a social network, one app points to another app... We'd literally double our footprint in a number of these platforms by adding EA and PopCap together, we can point back and forth to each other. That's a direct and important revenue driver." For example, after you're done playing Plants vs. Zombies, you may be able to easily boot up a game of Risk: Factions.

Beyond the synergistic opportunities afforded by today's announcement, EA will be able to strengthen their own platforms--specifically, Origin and Pogo.com. "There's no question that the addition of PopCap IP onto those platforms will make both platforms incrementally more attractive, bring more gravity to them."

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