The video game market is consolidating like never before, and Electronic Arts is scrambling like everyone else. The Battlefield and FIFA maker recently pursued a merger with NBCUniversal, and also held potential acquisition talks with Disney, Apple, and other companies, according to a new report by Puck. While a deal isn’t currently in the works, it doesn’t sound like EA plans to give up anytime soon.
“In recent years, as media companies have taken greater interest in the rapidly growing gaming industry, Wilson and Electronic Arts have held talks with a number of different potential suitors, including Disney, Apple and Amazon, sources with knowledge of those talks told me,” wrote Puck’s veteran media reporter, Dylan Beyers. “Several sources familiar with these talks say EA has been persistent in pursuing a sale, and has only grown more emboldened in the wake of the Microsoft-Activision deal. Others say that EA is primarily interested in a merger arrangement that would allow Wilson to remain as chief executive of the combined company.”
But it was apparently a deal with NBCUniversal that got the farthest along. According to Beyers, Comcast CEO Brian Roberts was looking to spin off the entertainment conglomerate into a separate entity with EA, with one version of the deal leaving current EA CEO Andrew Wilson in charge of the new mega-business. Negotiations eventually fell apart over price, however.
“We don’t comment on rumors and speculation relating to M&A,” EA spokesperson John Reseburg told Kotaku in a statement. “We are proud to be operating from a position of strength and growth, with a portfolio of amazing games, built around powerful IP, made by incredibly talented teams, and a network of more than half a billion players. We see a very bright future ahead.”
Over the past year there’s been a frenzy of video game studio acquisitions, one that was sent into overdrive in January after Grand Theft Auto publisher Take-Two announced it was buying Zynga for $12.7 billion and Microsoft announced it was planning to buy Call of Duty maker Activision Blizzard for $69 billion. Sony followed weeks later with a deal to buy the studio behind Destiny 2, Bungie, for $3.6 billion, a price some analysts considered massively inflated and possibly a sign of a new mad rush to consolidate among the gaming industry’s biggest players.
In an earnings call in February, Andrew Wilson implied the company was focused on making acquisitions rather than being acquired. As evidence, EA spent $5 billion over the last year buying up studios to increase its size. But now it appears the publisher has been aggressively pursuing other ways of scaling up. Beyers reports that Wilson approached Disney as recently as March “in pursuit of what sources described as ‘a more meaningful relationship’ than licensing deals.”
This news comes as EA has lost or abandoned some of its biggest existing licensing deals. While the publisher recently revealed three new Star Wars games currently in production, including a new Star Wars Jedi: Fallen Order that’s rumored to release early in 2023, its exclusivity deal with Disney for the Star Wars license isn’t going to be renewed when it expires in 2023. That’s allowed competitors like Quantic Dream and Ubisoft to announce their own big Star Wars projects. EA also revealed last week that it’s ending its similar 10-year exclusivity deal with FIFA, and beginning in 2023 will rebrand its blockbuster soccer franchise EA Sports FC.
Whatever EA’s future holds, one big concern with consolidation is how it will ultimately impact employees at these companies. Even as EA’s reported another profitable year, Kotaku recently learned that an estimated 200 customer service staff are being laid off. According to four of the impacted employees, their work is being outsourced to cheaper third-party vendors in Romania and India.
Comcast, Disney, and Apple did not immediately respond to a request for comment.