Electronic Arts snaps up casual games site for $274m

Natalie Apostolou
12/11/2009
News
Daily News

UK based social gaming specialist Playfish has been snapped up by Electronic Arts for €183 million ($274.2 million) in cash.

The purchase positions EA into the increasingly lucrative ‘social or casual’ online community gaming space, when consumer confidence is declining in traditional packaged video game sales.

In addition to the upfront cash payment, EA will tip in up to €66 million in cash if Playfish hits certain financial targets though December 2011. The deal includes €16.6 million in equity-based retention agreements with employees.

In unfortunate timing, EA later announced plans to cut 17% or 1,500 jobs as part of a massive restructure. The new cuts include 900 developers, 500 in game publishing, and 100 corporate positions. Earlier this year, EA culled 1,100 employees as part of a restructuring initiative. The layoffs are forecast to save about €66 million a year.

“We are focusing on what works and what matters,” EA chief financial officer Eric Brown said.

Digital content comprises about 12% of EA's revenue.

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