Attendees walk past an Electronic Arts (EA) “Minions Paradise” video game poster at the Electronic Entertainment Expo, or E3, in Los Angeles, California, United States, June 17, 2015. REUTERS/Lucy Nicholson
HONG KONG, June 24 (Reuters Breakingviews) – Electronic Arts (EA.O) is trying to assemble a dream team. The $40 billion video-games developer on Wednesday agreed to buy Playdemic, the studio behind the “Golf Clash” smartphone hit, for $1.4 billion. At up to 7 times sales, per Cowen estimates, the valuation is a premium to EA’s own 5 times.
While strong in consoles and personal computers with its FIFA soccer and Madden NFL football titles, EA is notably weak in mobile. It was one of the few to suffer a decline in such revenue during the pandemic. It’s trying to bulk up, however. Earlier this year, EA snapped up GluMobile for $2.1 billion, following a $1.2 billion takeover of car-racing game specialist Codemasters.
Competition with Take-Two Interactive, which EA outbid for Codemasters, is intense. Its smaller peer recently acquired a mobile soccer game and has developed other sports games. It’s a losing rivalry for now: Both companies’ shares have underperformed the S&P 500 index over the past year. (By Robyn Mak)
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Editing by Jeffrey Goldfarb and Katrina Hamlin
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