Electronic Arts acquires Playdemic for $1.4B

? Acquisition

• US-based multiplatform entertainment company Electronic Arts (NASDAQ:EA) acquires Golf Clash developer and publisher Playdemic Ltd. from WarnerMedia’s subsidiary TT Games for $1.4B in cash
• WarnerMedia divested Playdemic as part of its plan to focus on games based on Warner Bros. IPs

? Playdemic’s History

• Playdemic was founded in 2010 with a focus on Facebook gaming platform
• In January 2011, the company was acquired by RockYou, the US-based mobile game publisher that focuses on building in-game ad networks. However, later that year RockYou faced financial difficulties and the founders of Playdemic decided to buy their company back
• In February 2017, TT Games, the UK-based company known for its video games based on the Lego franchise, announced the acquisition of Playdemic to accelerate the mobile market expansion 

? Strategic Rationale

• Earlier this year EA acquired US-based mobile game developer Glu Mobile for $2.1B, which broadened the company’s mobile games portfolio with such sports titles as Tap Sports Baseball, Deer Hunter, and Tap Sports Fishing as well as some casual games and some others
• Playdemic will help EA to expand further into the mobile gaming market with a new Golf clash sports game. Currently, the mobile business generates ~13% of the EA’s revenue
• Playdemic’s executive team will provide EA with expertise in mobile clash games. The clash mechanic that Playdemic specializes in may be introduced into other EA games in the future

? Product

• Founded in 2010, Playdemic is best known for its 1v1 sports game Golf Clash which has over 80 million downloads globally
• The downloads peaked in August 2017 when the game was downloaded 2.8 million times
• Golf Clash is among the leading mobile games in the sports genre in the U.S. and the U.K.
• Since its launch, the game has amassed over $780m in player spending. In the last year, Golf Clash’s gross revenue reached approximately $185m

? EA’s Latest Acquisitions

• Playdemic is Electronic Arts’ fourth major acquisition in the past seven months:
  • In May’21, EA announced the acquisition of a Canada­-based PC&console game developer Metalhead Software. The sum of the deal remains undisclosed
  • In Feb’21 EA acquired US-based mobile game developer Glu Mobile (NASDAQ: GLUU) for $2.1B
  • In Dec’20, EA entered into an agreement to acquire UK-based racing games developer Codemasters Group (LON: CDM) for up to $1.2B. The deal was closed in Feb’21. 
• Recently EA entered top-5 Most Active Strategic Investors in Q1,21 according to Investgame ratings

Sources: EA

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