EA takes on Zynga, buys PopCap Games for $1.3bn

19/07/2011

Video game publisher Electronic Arts has bought PopCap Games as the video games publisher looks to expand into the growing casual games market. The deal, worth up to $1.3bn (£817m) comes as casual games giant Zynga looks set to float on the stock exchange. EA will pay about $650m in cash and $100m in common stock for the maker of the popular video games "Bejeweled" and "Plants vs. Zombies". It could pay a further $550m if PopCap hit certain performance targets in about two years.

19/07/2011

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The deal follows EA acquisition of social-games maker Playfish back in 2009 for a deal worth up to $400m.

EA is investing more in digital content as customers are buying fewer games on discs to play on consoles.

Video game companies are now offering users options to play free or low-priced games on mobile devices, PCs and Facebook.

The transaction is expected to close in August.

PopCap, which is based in Seattle, has been profitable for 10 years since its founding. It generated $100m in revenue in 2010.

It makes easy-to-play games for platforms such as Facebook, RenRen, Google Android, Apple iPhone and iPad.

For the deal, EA received $550 million in debt commitments from Morgan Stanley, JPMorgan Chasen and UBS. It was also advised by Morgan Stanley and UBS.

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