EA Buys Bioware and Pandemic

The story is here. Since I’ve worked pretty extensively with Bioware‘s stuff before (for Neverwinter Nights 2), I feel somehow obligated to react to this…heh. This is an interesting acquisition, and while I’m not any sort of expert in corporate finance, I do not think that this is necessarily a good move for EA. Why?

  • Some of the projects in development are risky new IP (Mass Effect and Dragon Age) — I say risky because Jade Empire, Bioware‘s first foray into the world of self-owned intellectual property, didn’t exactly set the world on fire sales-wise.
  • Some of the projects have the involvement of competitors to EA. Sega is publishing the Sonic RPG for DS, and Microsoft is publishing Mass Effect. It is unclear if Microsoft has any sort of rights of first refusal for Mass Effect sequels. It is also rumored that the MMO Bioware is working on is Star Wars-related, which would of course involve LucasArts.
  • EA was already set to publish Mercenaries 2 — by buying the developer, they’ve basically increased their risk exposure if it underperforms.
  • One of the projects, Dragon Age, appears to be a niche PC RPG. Now, while developing for the PC has the advantage of not needing to pay the console license “tax,” PC games typically do not sell anywhere near as well as console games. “Niche PC RPG” doesn’t seem to fit in very well with EA’s development philosophies — I can’t think of a single IP that EA has which they have not at least attempted to release across multiple platforms.

EA has been very keen on creating new IP to exploit — it’s a tired gaming forum cliche, but EA really is a sequel-oriented developer, and, beyond a certain threshold, sequel sales tend to dwindle precipitously. (This doesn’t apply as much to their sports games, which obey rules of their own.) So, from their perspective, maybe paying $855 million for an infusion of new ideas doesn’t seem like such a bad gamble. Given the history of some high-profile EA acquisitions of the past, though, it seems like they are risking yet another situation where the talent flees and EA is left holding an overvalued bag of IP.

Looking at it from another perspective, EA’s exclusivity deal with the NFL was rumored to be in the neighborhood of $1 billion. Does EA really think that they are going to get anywhere near the same kind of value out of Bioware/Pandemic?

Leave a comment

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.