Top
70°

Electronic Arts Rises on Acquisition Speculation

Bloomberg.com reports: The likelihood of a deal is "inconsequentially low," according to Doug Creutz, who said Electronic Arts derives too much revenue from Microsoft competitors Sony Corp., maker of the PlayStation 3 player, and Nintendo Co., which sells the Wii.

Doug Creutz is an analyst for Cowen & Co. in San Francisco.

Read Full Story >>
bloomberg.com
The story is too old to be commented.
Munky2918d ago

"The likelihood of a deal is “inconsequentially low,” according to Creutz, who said Electronic Arts derives too much revenue from Microsoft competitors Sony Corp., maker of the PlayStation 3 player, and Nintendo Co., which sells the Wii."

Sarcasm2917d ago

In other words

"F that, we make enough money on our own"

AKNAA2917d ago

"There is simply no way that Microsoft could make the math work due to the massive hit to EA’s revenue and earnings post- acquisition,” Creutz said."

Did he just say that MS wouldn't be able to afford it even if they wanted to buy EA?!! Lol!

I knew it wouldn't happen cause EA has to much of a good business relationship with Sony.

ginganinja2917d ago

Why buy a company with the aim of cutting its profits by about two thirds ?
MS could probably afford to buy it in the first instance, but surely the costs of turning a multi-platform giant into catering for just one machine would just make it dumb.
It'd be cheaper to set up a new company and 'lure' the talent away.

get2sammyb2917d ago

A move like this would essentially kill the industry as we know it. Microsoft could afford to do it but it would be a pretty outrageous move. It would be a MASSIVE bill for the company to have to swallow, but if it did get approved it would result in mega job loss, which the government wouldn't take kindly right now.

You also have the addition of Microsoft either directly funding Playstation/Nintendo development or losing like 70-80% of the companies return revenue. Then you have the FIFA/NFL licenses -- which are EA's biggest asset -- I can't imagine the licenseholders would be too happy with FIFA or Madden being XBOX exclusives, so those contracts would probably be void.

What you end up with is a bloated company without the various contracts that made them worth the money in the first place, and certainly without the 70-80% revenue return the company gets from developing on other platforms.

Basically, Microsoft would have to be stupid to do this. It'd be like paying 6Billion for a headache.

Miss Goblin2917d ago

This was already proven to be fake. Denied by Microsoft.

+ Show (3) more repliesLast reply 2917d ago
Bathyj2917d ago

If M$ were to buy EA or even Activision or Ubi, gaming as we know it would be over.

Even the worst fanboys here admits competition is a good thing. Does anyone thing this would be a good thing?

Ron_Burgundy2917d ago

no this is bad, EA not publishing for the Dreamcast is what killed it

rmedtx8882917d ago

If this is true. EA employees should start getting ready for a massive lay-off once MS buys the company. That happens all the time.

Grandreaper99992917d ago

If they bougth EA it wouldn't really be the same EA. They'd pay allll this money for the company, and then once they started choking off IP's to other consoles their revenue would tank. drop to at least 30% from what they normally rake in. Then you have stockholders and whatnot... It'd be a big mess not to mention a big blow to the industry as a whole.