EA Acquires Respawn Entertainment For Over $300 Million

Standby for moneyhats.

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Electronic Arts has no shortage of cash from their wildly profitable franchises, and it appears that they will be adding a studio to their roster going forward. Today the company announced it has acquired Titanfall producer Respawn for over $300 million, with another $140 million of additional payments contingent on performance milestones.

Here is the full press release from EA:


Leading Development Studio Brings Top Talent & Award-Winning Titanfall IP to EA's Portfolio

REDWOOD CITY, Calif.--(BUSINESS WIRE)-- Electronic Arts Inc. (NASDAQ: EA) announced today an agreement to acquire Respawn Entertainment, LLC, a leading independent game development studio and creators of AAA shooter and action games including the critically-acclaimed Titanfall™ franchise. Respawn brings to EA the proven leadership and studio talent behind Titanfall and Titanfall 2, two of the most highly-rated shooter titles in the last five years. The acquisition builds on a successful publishing partnership between Respawn and EA, with multiple projects currently in development - a new title in the Titanfall franchise, a game set in the Star Wars™ universe and a VR gaming experience.

"We've seen firsthand the world-class caliber of Respawn as a development studio with incredible vision, deep talent and an inspiring creative mindset," said Andrew Wilson, CEO of Electronic Arts. "Our longtime partnership is grounded in a shared desire to push the boundaries and deliver extraordinary and innovative new experiences for players around the world. Together, we've brought this to life in the Titanfall franchise, and now with the Respawn team joining EA, we have exciting plans to accomplish even more amazing things in the future."

"We started Respawn with the goal to create a studio with some of the best talent in the industry, and to be a top developer of innovative games," said Vince Zampella, CEO of Respawn Entertainment. "We felt that now was the time to join an industry leader that brings the resources and support we need for long term success, while still keeping our culture and creative freedom. EA has been a great partner over the years with Titanfall and Titanfall 2, and we're excited to combine our strengths. This is a great next step for Respawn, EA, and our players."

Respawn is the creator and developer of the critically-acclaimed Titanfallfranchise that energized the first-person shooter genre with its innovative gameplay. The first game, Titanfall, was published by EA in 2014, and received global recognition with more than 75 top awards. Fans and critics fell in love with the game's refreshing, fast-paced multiplayer gameplay. Respawn and EA launched Titanfall 2 in late 2016, with a new single-player campaign and expanded multiplayer gameplay, resulting in one of the year's top-rated shooters.

Respawn will join EA's Worldwide Studios organization, a global creative collective of leading game development studios bringing to life an unmatched portfolio of top games and services across all major platforms.

Under the agreement, EA will pay $151 million in cash, and up to $164 million in long-term equity in the form of restricted stock units to employees, which will vest over four years. In addition, EA may be required to pay additional variable cash consideration that is contingent upon achievement of certain performance milestones, relating to the development of future titles, through the end of calendar 2022. The additional consideration is limited to a maximum of $140 million. The transaction is expected to close by the end of the calendar 2017 or soon thereafter, subject to regulatory approvals and other customary closing conditions. The acquisition is expected to be neutral to EA's net income in fiscal years 2018 and 2019.


Standby for Titanfall's developer to be assimilated into EA.

Asif Khan is the CEO and majority shareholder of Shacknews. He began his career in video game journalism as a freelancer in 2001 for Tendobox.com. Asif is a CPA and was formerly an investment adviser representative. After much success in his own personal investments, he retired from his day job in financial services and is currently focused on new private investments. His favorite PC game of all time is Duke Nukem 3D, and he is an unapologetic fan of most things Nintendo. Asif first frequented the Shack when it was sCary's Shugashack to find all things Quake. When he is not immersed in investments or gaming he is a purveyor of fine electronic music. Asif also has an irrational love of Cleveland sports.

From The Chatty

  • reply
    November 9, 2017 2:25 PM

    Asif Khan posted a new article, EA Acquires Respawn Entertainment For Over $300 Million

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      November 9, 2017 2:27 PM

      Aaand another one's down, another one's down, another one bites the dust.

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        November 9, 2017 2:27 PM

        Meh. At least now when someone blames EA for some problem with Titanfall, it will actually be their fault.

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          November 9, 2017 2:28 PM

          Oh, respawn is dead now, they just won't know it for 5+ years.

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            November 9, 2017 2:29 PM

            You can say that about any game studio right now.

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              November 9, 2017 2:33 PM

              Most, not any, but it's the EA death knell that just rang.

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                November 9, 2017 3:00 PM

                I know I defend them every time this happens, but when was the last time they actually closed a studio that was still making big hits? Maxis? Westwood? Black Box? EA Chicago? Visceral?

                If anything, all of those had plenty of time or chances before they got canned for costing more money than they made. It’s business.

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                  November 9, 2017 3:32 PM

                  The problem is that EA forces them to do things that no one likes and then shuts them down after the game does poorly.

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                    November 9, 2017 4:04 PM

                    They swoop in, take control, fuck with the program, then can everyone when it fails. THE E-A-RISTOCRATS!

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                      November 9, 2017 5:29 PM

                      I don't think that is it entirely. When these studios get purchased a lot of the top talent seems to cash out and leave. I can't blame them but it ruins the studios.

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                        November 9, 2017 7:02 PM

                        At least we still have Mass Effect. It's not like EA would fuck up a cash cow like that.

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                          November 10, 2017 3:34 AM

                          Okay, even I have to LOL this. :( Giving it to EA Montreal was a huge, worrying gamble and the development troubles are well documented. I still have faith that Bioware will come good with that franchise again, they have a lot of talented folk still.

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                          November 10, 2017 4:32 AM

                          The sadness consumes us all.

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                    November 9, 2017 4:10 PM

                    Well, part of this is in the capability of the studio to prove to the company that its product is going to be successful.

                    That's a really hard thing to predict. The thing about larger publishers plus their subsidiary studios, is that you hear about canceled projects because of their massive marketing. In smaller studios, you never hear about their failures because there are not enough people there to get the story out. There are TONS of failure stories, though, and these small indie studios are typically one project away from folding up.

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                    November 9, 2017 4:54 PM

                    Well, if any company can weather this it should be Respawn, right? The core of Respawn is the team that put out MoH games under EA, and then left EA to form Infinity Ward with Activision's help, and then now it seems like they're going back to EA.

                    So the management should know exactly what they're getting into, I would think. Or at least, far more than the average EA acquisition.

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                      November 9, 2017 10:48 PM

                      Exactly - the circle of life in the games industry

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                      November 10, 2017 3:35 AM

                      There's that. I'm sure the mountain of cash would challenge any good judgement too though!

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                  November 9, 2017 4:07 PM

                  if a bunch of previously successful devs fall under new leadership and suddenly become unsuccessful what might be a common root cause? I mean EA presumably acquired them in the first place because they were deemed good and successful. And then they became not that. So...

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                  November 10, 2017 12:52 AM

                  EA can't manage their studios. They buy something that works, then break it, then shut it down. At least that's what Manveer Heir said lately on Waypoint.

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                  November 10, 2017 3:33 AM

                  Not true in many cases. They're certainly guilty of game design-by-committee/execs on the latest Need for Speeds, but I wouldn't say that was universal.

                  - Before being folded into EALA, Westwood finished up with Dune: Emperor Messiah, Earth and Beyond, Legend of Black Kat and C&C Renegade, all of which were commercial failures and sub-par games.

                  - Origin (they made worlds, not downloads) got to make Ultima IX at great expense, which was broken and flawed as fuck.

                  - Visceral got to make a story-driven game and by all accounts the development process was a total mess. you can blame its LACK of online/lootboxes/whatever on its cancellation, but it's pretty clear its problems were deeper than that and EA would have let it live if it was on track to being Star War's Uncharted.

                  - Sim City 4 certainly suffered from the online requirement, but even disregarding that it was a sub-par game so Maxis' days were numbered, especially with The Sims Division being separate.

                  I could go on. It's business. No company, even EA, sets out to gobble up and shit out a game studio - they've given most of these studios arguably more chances than they deserved to come good. Any of those studios would have died sooner outside of publisher ownership/funding.

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            November 9, 2017 10:52 PM

            Next time use spoiler tags please ;)

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            November 10, 2017 12:38 AM

            EA is the Reaper, and the games industry is a Throne of Lies match.

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      November 9, 2017 2:28 PM

      Standby for assimilation, and then https://imgur.com/gallery/NZalt

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          November 9, 2017 4:06 PM

          Damn, that's funny. Granted, I'd hate to be "that guy," but in a lot of cases, EA isn't all bad. It's actually a pretty complicated relationship between a publisher who purchases a studio and the remaining studio staff.

          In many cases, EA brings stability and much-needed cash-infusion into struggling businesses. I guarantee you that most companies who choose to get acquired by EA are probably not in the best shape they could be in. It's super fucking hard to run a video game company.

          However, the downside to EA's acquisition is that also bring more rigid structure and control. This could be in the form of stabilizing benefits to be in line with the rest of the corporation. It could also be in the form of common technologies in order to save on corporate licensing costs. Another way that EA changes companies is it gives these companies access to global talent, as the pool of talent resources that EA has access to is much greater than that of a local company. These changes are very rarely transformational. Rather, they are incremental, and they chip away at what made the original studio what it was. The studio changes its identity, although if it still has its original founders, it can resist those changes pretty hard.

          The downstream effects of all of these positive and negative influences is that it changes the culture. People who appreciate the autonomy and control of being an independent studio will leave. Honestly, I would say these are usually the most innovative folks. When your hands get tied on too many things, but you are also incredibly talented, the world is your oyster. The best talent in the industry is hard fought over, especially considering the average game developer's career is pretty short.

          TL;DR - an EA acquisition is complicated with pros and cons.

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        November 9, 2017 6:02 PM

        Man, just scrolling through that list hurts.

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      November 9, 2017 2:30 PM

      That's gotta hurt the ex visceral employees

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      November 9, 2017 2:53 PM

      Lol.

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      November 9, 2017 3:31 PM

      RIP.

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      November 9, 2017 3:49 PM

      Welp... GG

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      November 9, 2017 3:55 PM

      Well good news is that apparently Titanfall 1 and 2 did well right?

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      November 9, 2017 3:59 PM

      NNNNNNNNNNNNOOOOOOOOOOO now there will never be a titanfall 3 or if there will be then it will totally suck balls

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        November 9, 2017 6:03 PM

        Wait til you get Titanfall with cover shooting mechanics! And who needs that parkour shit no one wants to jump around like that.

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      November 9, 2017 4:06 PM

      RIP

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      November 9, 2017 4:43 PM

      Cool for the owners but bummer for everyone else

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      November 9, 2017 6:21 PM

      thats a nice payday

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      November 9, 2017 6:36 PM

      Goodbye Respawn, Titan "Fall".

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      November 9, 2017 10:48 PM

      ...And another brewery is bought by InBev.

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      November 10, 2017 12:25 AM

      So next titanfall will use frostbite instead of source engine?

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        November 10, 2017 12:56 AM

        And loot boxes, microtransactions and open, unending gameplay with slow progression grind that people can always come back to.

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          November 10, 2017 1:16 AM

          So you're saying people will actually play the game?

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      November 10, 2017 12:51 AM

      You can't even say "They had a good run". Two games and then off to the chopping block, that's gotta be some kind of record.

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      November 10, 2017 4:30 AM

      Well, I can't say I really care that much. Personally I hope EA puts Respawn in charge of making a sequel to Battlefield 2142.

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      November 10, 2017 4:40 AM

      they can make the SP campaign for battlefield one 2

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      November 14, 2017 7:33 PM

      It's funny how all this comes full circle. They were at EA doing Medal of Honor, then dipped out to Activision and created Call of Duty, then they left and went with EA publishing them and now they are full-blown EA again.