Holstein912
12-16-2008, 10:14 AM
Struggling games company Electronic Arts (EA) is on the sales block, for the right price. EA is the world’s second-largest games company although has been struggling just lately to make its numbers. Step forward Disney.
EA’s shares have slumped 67% this year and a few days ago CEO John Riccitiello said: “While we saw significant improvement in the overall quality of our key products this year, we are disappointed that our holiday slate is not meeting our sales expectations.”
The logic is that Disney would make the most of the synergies that EA’s asset base could generate, especially in the Disney theme parks. EA has a gaming sports division which might fit well with ESPN, for example, while Disney’s youth-targeted on-line game play would make good use of EA’s portfolio.
Eric Krangel of Silicon Alley Insider last week noted that in spite of the perception that the computer game sector can be seen as robustly counter-cyclical, given it provides cheap entertainment and keep users occupied at home rather than going out - it is not necessarily the case.
"Games are indeed cheap entertainment, and proven goods like World of Warcraft will continue to do well. But as gamers face tough times, they'll be less likely to splurge on marginal games, preferring to stick with games they know they'll like," argues Krangel.
But Disney is not alone. Japanese gaming giant Square Enix could also be an interested party. Square merged with Enix back in 2003, and the Square portion of the company already had a joint-venture with EA in the shape of Square Electronic Arts formed in 1998, and which held the USA rights to Square’s titles, while Electronic Arts Square in essence held the Asian rights to EA’s titles.
With the merger with Enix, Square purchased back EA’s stake in Square EA and rolled it into a new US subsidiary Square Enix Inc.
Meanwhile Square Enix is reportedly looking to buy Eidos Interactive, although other names like Warner Bros and France’s Ubisoft are also mentioned as interested parties.
Source: Rapid TV News
Holstein912
EA’s shares have slumped 67% this year and a few days ago CEO John Riccitiello said: “While we saw significant improvement in the overall quality of our key products this year, we are disappointed that our holiday slate is not meeting our sales expectations.”
The logic is that Disney would make the most of the synergies that EA’s asset base could generate, especially in the Disney theme parks. EA has a gaming sports division which might fit well with ESPN, for example, while Disney’s youth-targeted on-line game play would make good use of EA’s portfolio.
Eric Krangel of Silicon Alley Insider last week noted that in spite of the perception that the computer game sector can be seen as robustly counter-cyclical, given it provides cheap entertainment and keep users occupied at home rather than going out - it is not necessarily the case.
"Games are indeed cheap entertainment, and proven goods like World of Warcraft will continue to do well. But as gamers face tough times, they'll be less likely to splurge on marginal games, preferring to stick with games they know they'll like," argues Krangel.
But Disney is not alone. Japanese gaming giant Square Enix could also be an interested party. Square merged with Enix back in 2003, and the Square portion of the company already had a joint-venture with EA in the shape of Square Electronic Arts formed in 1998, and which held the USA rights to Square’s titles, while Electronic Arts Square in essence held the Asian rights to EA’s titles.
With the merger with Enix, Square purchased back EA’s stake in Square EA and rolled it into a new US subsidiary Square Enix Inc.
Meanwhile Square Enix is reportedly looking to buy Eidos Interactive, although other names like Warner Bros and France’s Ubisoft are also mentioned as interested parties.
Source: Rapid TV News
Holstein912