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Jul 13, 2011
EA has bought casual gaming giant PopCap Games in a deal worth $1.3 billion.
The Bejeweled, Zuma, Peggle and Plants vs. Zombies creator will receive $650 million in cash and $100 million in stock. PopCap will be given an additional $550 million in bonuses in next few years for hitting money-making milestones. I'd like that kind of dosh please.
PopCap has 400 staff.
"As some of you may have heard, we recently announced that PopCap Games is being acquired by Electronic Arts, a small mom-and-pop boutique software publisher," wrote PopCap.
"What does this mean for the future? It's simple: 1, EA is being rebranded to Poptronic Arts; 2, Sim Zuma: The SwampLife Edition; 3, Peggle: Dead Space Bjorn's Breakfast; 4, Bejeweled Battlefield Blitz; 5, Plants vs. ZombEAz: NFL Lockout Edition."
PopCap will be able to draw on deeper resources and distribute to a wider audience worldwide. "We're not changing our focus from creating awesome casual games everyone can enjoy," the company said.
Buying the digital clout of PopCap is an impressive statement of EA's intent to aggressively pursue digital gaming.
EA snapped up prominent social gaming outfit PlayFish in 2009, in a deal worth $400 million.
Let's hope Battlefield 3 and Mass Effect 3 can recoup some of that money.
Only one question remains: what will happen to PopCap's exciting new game Johnny Minkley's Meat Ceiling
Jun 25, 2011
Published as part of our sister-site GamesIndustry.biz's widely-read weekly newsletter, the GamesIndustry.biz Editorial, is a weekly dissection of an issue weighing on the minds of the people at the top of the games business. It appears on Eurogamer after it goes out to GI.biz newsletter subscribers.
By any standards, PopCap is a remarkable company. Of the many new games companies to emerge from the new social and mobile gaming scene, it's one of the only ones which manages to sustain a delicate and difficult balancing act - appealing to an enormous swathe of the mainstream, casual market while still commanding significant respect from core gamers.
In the past decade, the company has proved its ability not only to keenly and intelligently exploit its flagship franchise - Bejeweled - but also to generate new IP that's just as compelling as that original break-out hit, including Peggle, Plants Vs. Zombies and Zuma. Moreover, it seemingly effortlessly straddles the mobile and social gaming sectors, just as comfortable providing apps to iPhone users, coffee-break entertainment to Facebook users and downloadable titles on Steam for more dedicated gamers.
There's absolutely no question that PopCap is a great games company. However, if this week's rumours turn out to be correct, and the company sells for $1 billion, it will be the final confirmation of something that's been whispered for a while now - that social and mobile gaming, along with the "social internet" in general, has become a bubble market.
Finnish firm Rovio took in $42 million in a funding round which even the investors admitted the company didn't actually need.
In the past year, company valuations in this sector have soared, and some truly eye-watering deals have gone through. Last October, Japanese mobile gaming giant DeNA paid out up to $400 million for iOS game developer ngmoco - another great company with fantastic products whose price tag raised plenty of eyebrows. Not to be outdone, DeNA's local rival GREE dropped over $100 million in cash on OpenFeint - creators of a social gaming platform for iPhone and Android.
In the west, EA paid $300 million for PlayFish last year, while Disney paid $760 million for Playdom, and has been aggressively restructuring its entire games business around the social gaming model - with mixed results.
Those are just samples of the deals we know about, because they were made in public. The biggest fish in the pond, Zynga, bears a price tag as high as $10 billion according to some valuations. It's not just in acquisitions that the figures are getting breath-takingly high, either - venture capitalists seem to have caught the fever too. Back in March, Finnish firm Rovio - a developer with only one hit to its name, even if that hit is the seemingly ubiquitous Angry Birds - took in $42 million in a funding round which even the investors admitted the company didn't actually need.
It's not just games, of course. In the wider world of the social internet, analysts mostly seemed to come around to the idea that we had entered a bubble market when Color Labs raised $41 million in first-round funding for an iPhone application which not only hadn't yet been written, but which nobody even seemed to be able to explain without resorting to buzzword-laden drivel. That's even before we start to consider the valuation of a company like Twitter - whose service is wonderful, but whose long-term plan for making money seems almost as confused and optimistic as the worst of the dot.com era hopefuls.
Yet even if the wider bubble in the social internet allows us to place the money flying around the social and mobile gaming sector into a logical context, it doesn't do anything to defuse the potential damage of an implosion. What happens when a bubble bursts in a market like this? That's predictable enough - purchasers are left holding an asset that's not worth what they paid for it, and potentially laden with debt which they took on to pay for that asset, while everyone else finds that funding dries up as investors take flight.
So who is exposed to this kind of risk? Electronic Arts, as mentioned, has a $300 million investment in PlayFish. It's no stranger to large acquisitions in this space - it paid out $680 million for mobile publisher JAMDAT back in 2005, although that's not a deal it may particularly want to be reminded of, given that it later had to knock around 50% off its valuation of the asset. Crucially, EA is also linked to the billion-dollar PopCap deal that's said to be on the table, although it's hard to say how credible that is. EA's financial position wouldn't allow it to make an acquisition on that scale easily - it could be done, of course, but it will be an immense risk for the company to swallow.
Disney has committed itself even more heavily to the space than EA, but its Playdom acquisition has been criticised on many fronts for under performing - and although the company has redoubled its commitment to a future in the social games space, it's yet to turn that commitment into any kind of leadership position. However, Disney actually isn't terribly exposed to a social gaming "bubble"; it may have paid above the odds for its investments, but it's an enormous company which can afford to swallow those losses, and the investment bubble shouldn't disguise the fact that social gaming itself is still a market with growing audience and revenues, one which a firm like Disney can ill-afford to ignore.
Whoever ends up buying PopCap will own a social gaming developer whose success is almost unrivalled and whose skills and experience can potentially unlock vast swathes of the marketplace.
Beyond those two firms, others do have significant involvement in mobile gaming - Ubisoft, through GameLoft, being a great example - but have mostly avoided getting caught up in the bubble. Indeed, GameLoft CFO Alexandre de Rochefort was one of the main voices to warn of this emerging situation, earlier this year.
Instead, the investment has come heavily from VCs, and from Asia - and sometimes from both. Asian companies, both Chinese and Japanese, are very keen to invest in this market, and the Japanese firms in particular have been both spurred by the need to keep abreast of the smartphone growth that's displacing the huge "featurephone" market in their native territory, and emboldened by the historic strength of the Yen which allows overseas acquisitions to be made on the cheap, at least relatively speaking.
What happens to those companies when the confidence leaks out of the market and the bubble collapses? It's therein, I think, that the really interesting question about what this bubble actually means to the games industry starts to find some answers.
Nobody - be they a corporation or a private individual - wants to end up holding an asset that's worth far less than they paid for it, but that doesn't tell the entire story. As mentioned above, the ludicrous prices flying around in this sector disguise an underlying story that's arguably much more important - a story of immense growth in both audience and revenue, growth which doesn't justify those prices but which does certainly justify much of the interest being taken in this market.
For companies in Asia seeking to build their presence in the West, or for Western media firms determined to stay on top of developments in their sector, one could argue that social and mobile gaming acquisitions aren't really an "investment" in sense of asset growth. Yes, it would be lovely to buy an asset and watch its value swell on your balance sheet - but what's more important to these firms is to buy into a market, expanding their global or demographic presence and, crucially, denying their rivals an opportunity to do likewise.
Even once the bubble bursts, DeNA - to pick an example - will own a leading mobile developer with fantastic insight and experience in the western market. Whoever ends up buying PopCap will own a social gaming developer whose success is almost unrivalled and whose skills and experience can potentially unlock vast swathes of the marketplace. Their asset values may implode, and the markets aren't likely to like that very much, but the core reasons for the acquisitions will remain.
In other words, if you've got the money to buy, and if your business strategy requires or benefits from this kind of acquisition - then the bubble in the mobile and social markets only matters to you because it'll make it harder to make back the money you spend, but you're in this for the long term and the acquisition may still make sense. Where it matters more is to those companies and investors who are just hopping on the bandwagon because everyone else is doing it, throwing millions at companies with little IP to their name or incredibly risky business plans. Moreover, it definitely matters to companies who really don't have the money for this kind of investment, and will seriously suffer if its value collapses.
A bubble market is by no means a good thing, but equally, it's not a sign that everyone should cower and wait for the sky to fall. It simply means that companies need to be much more wary about their investments, and accept that the gambling stakes are much, much higher than usual. Mobile and social gaming is here to stay - but these valuations are not. If calm heads prevail, we can at least hope that none of the games business' great names get dragged down when the madness eventually ends.
If you work in the games industry and want more views, and up-to-date news relevant to your business, read our sister website GamesIndustry.biz, where you can find this weekly editorial column as soon as it is posted.
Apr 20, 2011
Welcome to Cheap This Week! We already tell you which games are out this week, so we thought we'd try bringing you a weekly roundup of the best deals in gaming as well. Look out for Cheap This Week each Wednesday.
If one update every seven days isn't enough to satisfy your hunger for gaming value, you can also check out my website SavyGamer.co.uk (hi, I'm Lewie!), which is always up to date with the hottest discounts from all over.
Here's what's Cheap This Week
In my day, the difference between the different versions of Mortal Kombat was that the SEGA version had blood and the Nintendo version had sweat. Today, the only platform-exclusive factor is cross-promotion of the God of War franchise in the form of playable Kratos in the PS3 version.
It's out at the end of the week, and under 30 quid seems like a fairly decent pre-order price. Check out Eurogamer's review to know for sure.
Resident Evil: Operation Raccoon City - PC £23.84 delivered
Save yourself a few quid by getting your order in early here. Details are still a bit scarce on ORC, but you can familiarise yourself with what we know so far in Wesley's preview.
Capcom has drafted in SOCOM: Confrontation developer Slant 6 for this Resident Evil spin-off/interquel. It's not due out until the end of the year, but if you get your pre-order in now, Shopto won't charge you until they ship it anyway (as long as you are paying by card), and you can always cancel this if a better offer comes up, or if you change your mind. Spooky trailer available already.
I really enjoyed the first Dead Space, but was pleasantly surprised that the sequel was a major improvement from the first game. Probably the biggest change for me was the variety of environments rather than being entirely set on a big space ship, you get to go to all sorts of locations.
It's perhaps a little on the short side, but it more than makes up for it with the best stomp attack from any game ever. So much so that I call it Dead Stomp instead. Check out Simon's review (of the game, not my sense of humour).
As well as the base game being made available for half price, the Peggle Nights expansion is 50 per cent off too.
Dan (rightly) sang Peggle XBLA's praises back when it released in March of 2009. It's not my favourite version the PC version has more precise controls and the iOS version is compatible with the outside world but the Xbox version of Peggle has the shiniest graphics, and the controls are more than adequate.
At this point you're listening to the advice of a man who has freely admitted to owning Peggle on three different formats, so perhaps it's best if we move on.
Deal of the Week
Nintendo 3DS bundles, from £189.99 delivered.
It's not even been out a month, but GAME is already offering some fairly decent discounts on the 3DS when bought with a game.
For £189.99 you can get the console with Super Monkey Ball or The Sims 3. For £199.99 you can get a bundle with either Nintendogs + Cats: Golden Retriever, LEGO Star Wars III: The Clone Wars or Super Street Fighter IV.
If you're just after the console (I know lots of people are holding out for Ocarina of Time), you could buy the Super Monkey Ball bundle and trade the game in for £25 at Gamestation via CEX pricematch.
Oli's extensive 3DS review is a great summary of why you should be interested, and if you fancy trying the 3D effect yourself before putting your money down, every GAME branch I've been in over the last few weeks has had a demo unit to try. Not that I trawl them or anything (I do).
Also of note this week...
- Blue Toad Murder Files, PS3 £7.19 on PSN.
- After Burner Climax, Xbox 360 400 MS Points
- OutRun Online Arcade, Xbox 360 400 MS Points
- ilomilo, Xbox 360 - 400 MS Points (Xbox Live Gold subscribers only)
- Plants vs. Zombies, Xbox 360 - 800 MS Points (Xbox Live Gold subscribers only)
Feb 16, 2011
Casual games like Peggle and Bejeweled help ease the symptoms of clinical depression, according to a new study.
The survey, conducted by East Carolina University and underwritten by PopCap Games, followed 59 patients suffering from depression for a month. Some of them played PopCap titles Bejeweled 2, Peggle and Bookworm Adventures for a set amount of time each day, while a 'control' group surfed the National Institute of Mental Health's Web page on depression.
After the study was finished, the test subjects who played games saw symptoms reduce by 57 per cent on average.
The professor in charge of the study, Dr. Carmen Russoniello, noted that subjects suffered no negative side-effects and went on to recommend that the games be prescribed by doctors.
"The results of this study clearly demonstrate the intrinsic value of certain casual games in terms of significant, positive effects on the moods and anxiety levels of people suffering from any level of depression," Russoniello explained.
"Given that only 25 per cent of people who suffer from depression are receiving treatment, it seems prudent to make these low cost, readily accessible casual games video games available to those who need them.
"They should be made available at health clinics, community centers, online 'medical sites' and given out by therapists as a means of intervention."
Nov 23, 2010
All downloadable PopCap games are half-price from the PopCap website until Monday, 29th November.
This excludes any bundle deals or game packs.
PopCap, a renowned puzzle maker, is responsible for Plants vs. Zombies (9/10 - Eurogamer), Zuma's Revenge (8/10 - Eurogamer), Peggle Deluxe (9/10 - Eurogamer) and Bejeweled 3 (out on 7th December) - to name a few.
The most exciting PopCap news today, however, is that top secret new game Johnny Minkley's Meat Ceiling has been spotted. An anonymous PopCap insider sent Eurogamer this image from the company's Seattle studio.
PopCap co-founder John Vechey bet Eurogamer TV presenter Johnny Minkley that he couldn't eat an enormous piece of meat in a restaurant. His end of the bargain? To make a game starring Johnny Minkley and meat if he lost.
And he did.
Nov 12, 2010
Peggle, PopCap's classic pinball-meets-pachinko timewaster, is coming to PSP next week.
You'll be able to download the game from the PlayStation Store on Tuesday, priced $9.99. A UK price hasn't been confirmed yet.
The game's associate producer told the PlayStation Blog, "Our expert Peggle Institute Programmers were able to get the full, original Peggle Experience into your PSP.
"All the original Masters, challenges, and levels in adventure mode are here! There were some late nights and long meetings with Bjorn and Master Hu, but we got there!"
Honestly, if you don't have a copy of the game yet, you need to check yourself it's an unfeasibly brilliant confection.
However, it's worth bearing in mind that the equally full-featured iPhone version comes in considerably cheaper at £1.79.