EA Agrees to Pay $860 Million For Pandemic Studios, Bioware

Home Forums Discussion Forums Makes you go, Hmmmm? EA Agrees to Pay $860 Million For Pandemic Studios, Bioware

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  • #32614
    Brindisium
    Member
    • Markshire PCs:

    😯 I just cant find a way to be upbeat about this. Going to bed depressed.

    EA Agrees to Pay $860 Million
    For Pandemic Studios, Bioware

    October 11, 2007 4:16 p.m. Eastern

    Electronic Arts Inc., seeking to bolster its lineup of action, adventure and role-playing games, reached an agreement with Silicon Valley private equity firm Elevation Partners to acquire VG Holdings Corp., the parent company of game makers BioWare Corp. and Pandemic Studios, in an $860 million deal.

    The deal, the largest in EA’s history, will add to EA’s portfolio ten games that are currently under development, including Mass Effect and Mercenaries 2: World in Flames, two games generating buzz in the industry. Six of the games are owned in total by VG Holdings, which fits in with a broad movement by EA to fully control the rights to more of the games it publishes, instead of sharing ownership with movies studios and other partners.

    “This deal brings incredible talent to EA,” Frank Gibeau, president of EA Games. “It puts us in categories where EA historically has not had a strong competitive position.”

    EA said it will pay up to $620 million in cash to the stockholders of VG Holdings, $155 million in equity to certain employees of VG Holdings that will be subject to time- and performance-based vesting requirements and the assumption of about $50 million in outstanding VG stock options. EA will also lendf VG up to $35 million through the closing of the deal.

    The deal was more complicated than others for EA to negotiate. In April, one of the founding partners of Elevation, John Riccitiello, became the new CEO of EA. While at Elevation, Mr. Riccitiello oversaw the company’s acquisition of Bioware and Pandemic for undisclosed terms and merger of the two entities into a new holding company, VG Holdings, into which Elevation invested more than $300 million.

    To avoid the appearance of a conflict of interest, EA executives said Mr. Riccitiello recused himself from negotiating financial terms of EA’s acquisition of VG Holdings and abstained from the EA board’s vote on the deal, though they said Mr. Riccitiello endorsed the deal. Mr. Riccitiello could also personally benefit from the deal depending on how Elevation’s fund performs over time, said Warren Jenson, EA’s chief financial officer.

    The deal is the first time Elevation, which counts the U2 singer Bono among its partners, has cashed out of one of its investments. According to a person familiar with the matter, Elevation is seeing a return of roughly two-times its original investment on the EA deal.

    http://forums.bioware.com/viewtopic.html?topic=590172&forum=22

    #53856
    Thrym
    Keymaster
    • Markshire PCs: Grottle, Gruzk, Ashimar

    Well, to be honest, NWN, the game isn’t supported directly by Bioware anymore. They are simply upholding their end of the deal with Obsidian and maintaining the forums.

    They say they are developing the update, 1.69, but, if it’s anything like 1.68, I can live without it.

    I enjoy NWN. I think Gamespy will continue to manage the server hosting system (which is largely unnecessary) and the NWVault which has nothing directly related to Bioware except for advertising dollars will continue to support the game.

    Hel, we still support Classic Games like Pong, Donkey Kong and others at http://classicgaming.gamespy.com. Look how long EverQuest’s been around. We still have a Vault site for them as well.

    Nope, even if Bioware goes under (which isn’t likely with the moderate success of their last 4 games) we’ll continue to have the support of the community. Plus the next generation is in the hands of a completely different company who, I think at least, has a better grasp of the concepts of our type of game.

    *resumes work on MS2*

    As you were.

    #53857
    Corgano
    Participant
    • Markshire PCs:

    I’m highly amused at the thought of John Madden doing a play-by-play for NWN 3…

    JM: “…And then, BAM! He hits him with his sword! And then BAM, BAM!! Nails him twice more! …”

    Bob: *Shakes head* “Brilliant commentary John…”

    😛 Sorry, my sense of humor is waaaaaaay out there tonight!

    #53858
    Monty
    Keymaster
    • Markshire PCs:

    Yeah, but it’s when Madden starts to draw in midair on the Glowing Rune telestrator thing’s will really go to Hel in a handbasket….

    😀

    M3C

    P.S. – It’s IN THE GAME!

    #53859
    Cayle
    Participant
    • Markshire PCs:

    And I just finished cracking a Madden MMO joke on the slashdot article on this subject.

    This has no effect on NWN, which is now legacy software. It has no effect on Mass Effect, which is ready to ship and it likely won’t effect Dragon Age much. But I can imagine that Damian Schubert is a very unhappy man today. For those of you that don’t know who he is, he is one of the MMO design luminaries that got his start building MUDs in the early 90’s. His MUD scene buddy Raph Koster hired him to be a designer for UO, he worked on UO2, SWG and is now the lead designer on Bioware’s MMO.

    #53860
    Thrym
    Keymaster
    • Markshire PCs: Grottle, Gruzk, Ashimar

    @QSW @ NWVault :: Friday, 12 Oct, 2007 wrote:

    BioWare Responses on the EA buyout

    “Drs. Ray Muzyka and Greg Zeschuk discuss their studios’ big deal–and reveal Dragon Age and top-secret MMORPG are already playable” to Tor Thorsen, from GameSpot. Overall BioWare’s CEOs seem really excited about being bought by EA, and say that this partnership will allow them to do bigger and better things with so many resources available to them now. They also state quite firmly that they are still “independent”. To read more hop on over to GameSpot, here is an excerpt:

    GameSpot: Going from the worlds’ biggest independent developer to part of the world’s biggest publisher? People are kind of taken aback. What’s your reaction to that?

    Ray Myzuka: Well, I’m really excited about the opportunity to integrate the great development teams we have here, the marketing teams we have here. As you said, EA is the largest, and I think, the best publisher in the world, and I think we can [add] some value to that team, and that organization as a partnership.

    GS: Right, but you guys were always an icon of independent development, and were even more so after the deal with Pandemic…

    Greg Zeschuk: Well, to be blunt, I don’t really see ourselves as not being independent anymore. We’ve got a goal of making great BioWare games, and we believe in [EA CEO] John [Riccitiello]’s vision–we can’t overemphasize that. We’ve worked with John for years, and we’re looking forward to keep doing what we’re doing and doing it well.

    GS: You said you still think of yourself as being independent, even though you’re now owned by EA. So what exactly, besides the fact you’re obviously wealthier, has changed under the deal? Will day-to-day operations at BioWare change at all?

    RM: Well, we can achieve more. We’ve got more opportunities, more resources for the great development and marketing teams here to take advantage of. We’re also a lot more direct to the consumer now, since we’re part of the publisher. It’s going to allow us to fulfill our mission statement of making the best story-driven games in the world, even better than before. Nothing’s going to change about that, since we’re really passionate about that, and that’s in line with what we’ve heard from John in the values and mission he’s expressed.

    #53861
    mule
    Moderator
    • Markshire PCs:

    Independent? Time will tell. Oh and why do people assume because they have more money they can achieve more? And why do they assume that what they’ll achieve with the extra cash will be “Greater” or “better”?

    But like I said, time will tell.

    – mule

    #53862
    Cayle
    Participant
    • Markshire PCs:

    Well, Bungee was able to do usability testing up the wazoo for Halo 3, but the price was that it only runs in a microsoft environment. This may not be a tragedy, but remember that Bungee got its start as a Mac developer. On the other hand, given that it costs 50 million to create a AAA MMO these days and god knows what to operate it from day to day, I suspect that Bioware’s Austin office will get some scrutiny and Bioware’s online game will likely more risk adverse than it would otherwise have been. More resources is good, but what is done with them has to justify the extra investent; i.e. is needs to reach a broader market.

    In October 2007, we can only speculate. Let’s wait and see.

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