In a move announced late yesterday, Electronic Arts announced a deal to purchase VG Holding Corp, the company that owns respected developers Bioware and Pandemic Studios.
The deal, which will cost EA about 775 million, will give them an advantage in key genres, including action, adventure, and roleplaying games (according to MarketWatch)
Leaders of both companies seem optimistic, but how much of this is "appeasing the new boss" BS is unclear. Pandemic president Josh Resnick stated, "Pandemic Studios remains focused on attracting the best talent and creating blockbuster action games. As a worldwide publishing leader, EA represents the ideal partner to bring our titles to market as global entertainment events" Bioware head Ray Muzyka said, "We are truly excited by John Riccitiello's new vision for EA. This vision is consistent with BioWare's focus on crafting the highest quality story-driven games in the world. It will enable us to further the careers of the passionate, creative and hard working teams at BioWare Edmonton and BioWare Austin"
For those not keeping score, John Riccitiello is the former COO of EA who left in 2004 to form private equity firm Elevation Partners, which (until yesterday) owned Bioware and Pandemic. He rejoined EA in February as the new CEO.
What this means for all parties involved isn't clear yet. The deal is supposed to wrap up in January of 2008, but the timing of this announcement may have something to do with the posting of EA's second quarter results, set for November 1st.
: Games Industry
has more details on the acquisition. According to them, the total final cost to EA will be in the range of 860 million, which will take EA around 2 years to make back. John Riccitiello, who admitted having a "residual interest" in Elevation Partners, made clear that the acquisition was made through an independent audit committee. Riccitiello did not disclose any personal benefit to the deal, but forms filed by EA to the SEC indicate that the CEO could personally make almost $5 million from the purchase.