EA reportedly tried to sell itself to Apple

Posted:
in AAPL Investors edited May 21
EA has reportedly been seeking out a merger and Apple was a potential suitor, a report about Comcast CEO Brian Roberts' attempt to merge NBC with the game publisher reveals.




Apple has a long history of making acquisitions, partly to bolster its employee and knowledge base, partly to quickly shift into new markets. In a Friday report, it is claimed that there were at least discussions of a potential purchase of Electronic Arts.

In a piece discussing how Comcast CEO Brian Roberts attempted to court EA CEO Andrew Wilson for a potential merger of EA and NBCUniversal, sources say other talks also took place.

Sources of Puck claim Wilson and EA have talked to "a number of potential suitors" for a sale over the last few years. The suitors included Apple, as well as Disney and Amazon.

It is said that EA has been keen to pursue a sale, and with the numerous acquisitions at the start of 2022, the game publisher became "more emboldened" to achieve its goal. Those tie-ups include Sony's $3.6 billion acquisition of "Destiny" game studio Bungie, Take-Two Interactive's $12.7 billion purchase of Zynga, and Microsoft's $68.7 billion deal to buy Activision Blizzard.

As part of the negotiations, sources say that EA is keen to be part of a merger that "would allow Wilson to remain as chief executive of the combined company."

Apple, Amazon, and Disney all declined to comment on the story.

While Apple has gradually moved into gaming, such as by its Apple Arcade subscription, it seems unlikely that it would go for such an acquisition. Apple doesn't tend to make acquisitions at such huge scales, with the most notable exception being the $3 billion Beats Music and Beats Electronics purchase in 2014.

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Comments

  • Reply 1 of 46
    melgrossmelgross Posts: 33,253member
    If true, Apple should have bought them.
    Xed9secondkox2muthuk_vanalingambyronl
  • Reply 2 of 46
    mpantonempantone Posts: 1,795member
    If true, EA was asking way too much which would explain why they are still an independent company despite courting multiple suitors.
    narwhalentropys
  • Reply 3 of 46
    iSRSiSRS Posts: 41member
    that "would allow Wilson to remain as chief executive of the combined company."


    Umm…. Really? Think Amazon, Apple or Disney would even consider such a thing? Dude sounds like he’s on an ego trip


    genovellenarwhalentropysviclauyycravnorodombyronlfahlman
  • Reply 4 of 46
    genovellegenovelle Posts: 1,366member
    iSRS said:
    that "would allow Wilson to remain as chief executive of the combined company."


    Umm…. Really? Think Amazon, Apple or Disney would even consider such a thing? Dude sounds like he’s on an ego trip

    He sounds nuts! Why on earth would a far more successful company merge with the less successful company and put the guy who ran the company being consumed in charge  

    Apple’s situation with Steve Jobs was to regain their founder so he could right the ship 


    iSRSbyronl
  • Reply 5 of 46
    22july201322july2013 Posts: 2,937member
    The main reason Apple would have rejected EA is that less than 20% of EA's game catalog runs on Macs or iOS. Why would Apple want games that are almost entirely made for Windows, Xbox, Nintendo, Playstation and Android?

    Market cap of EA is $36B. So they were probably asking $50B.

    foregoneconclusionravnorodombyronldewmefahlmanjony0
  • Reply 6 of 46
    The main reason Apple would have rejected EA is that less than 20% of EA's game catalog runs on Macs or iOS. Why would Apple want games that are almost entirely made for Windows, Xbox, Nintendo, Playstation and Android?

    Market cap of EA is $36B. So they were probably asking $50B.

    Microsoft or Google will be much better suitor. Why EA is not seeking them? 
    byronl
  • Reply 7 of 46
    BeatsBeats Posts: 3,016member
    The main reason Apple would have rejected EA is that less than 20% of EA's game catalog runs on Macs or iOS. Why would Apple want games that are almost entirely made for Windows, Xbox, Nintendo, Playstation and Android?

    Market cap of EA is $36B. So they were probably asking $50B.


    Because the future. Why do people have a hard time seeing the possibilities of the future?

    This only makes it a better deal. This would mean Apple could port the 80% of games that aren’t on Mac and cause a snowball effect.

    If EA was a Mac exclusive developer, what would Apple gain?

    I’m not suggesting it would be a good acquisition, just saying this is a good reason. 
    Alex1Nmuthuk_vanalingambyronljony0
  • Reply 8 of 46
    BeatsBeats Posts: 3,016member
    EA gets worst company in the world award often, sometimes twice in a row. They better offer a good deal.

    With that said, it’s long overdue Apple acquire a game studio. Doesn’t even have to be a multi-billion dollar one. Acquire a small indie studio, Apple has the funds to develop all their ideas.
    muthuk_vanalingamStrangeDaysbyronlskippingrockjony0elijahg
  • Reply 9 of 46
    MarvinMarvin Posts: 14,753moderator
    The main reason Apple would have rejected EA is that less than 20% of EA's game catalog runs on Macs or iOS. Why would Apple want games that are almost entirely made for Windows, Xbox, Nintendo, Playstation and Android?

    Market cap of EA is $36B. So they were probably asking $50B.
    They also make most of their revenue from Live Service games rather than outright purchases.

    $1.6b from game sales (Fifa 20/21, Madden NFL, Star Wars, Need for Speed), $4b from Live Service games (Fifa Ultimate Team, Apex Legends, Sims 4).

    They have 11000 employees.

    Net income was $837m in 2021, $3b in 2020 (due to income tax benefit of $1.5b), $1b in 2019.

    They have $7.8b in stockholders' equity.

    A $36b market cap seems reasonable vs their earnings and assets but it would be hard to justify more and they are heavily dependent on recurring revenue from legacy (and cross-platform) titles.

    Apple is obviously courted due to deep pockets and would be a much easier ride. They couldn't give them the Apple CEO position but they could have an SVP of games or run it as a subsidiary. Phil Spencer is CEO of Microsoft Games, which is a subsidiary of Microsoft.

    They would get a game engine (Frostbite - https://www.ea.com/frostbite/engine )) but there are reports EA will use Unreal Engine 5 for some upcoming titles like Mass Effect and The Sims. This would create a dependence on Epic who has a lawsuit against Apple.

    Smaller purchases would probably be more suited to Apple's gaming aspirations. Ubisoft is only valued around $6b and they can deliver similar quality to EA. They also have a game engine Dunia, forked from CryEngine and SnowDrop Engine.

    These companies make a lot of revenue from shooting games. With Apple Arcade content, they tend to go more for family-friendly games. They might be able to commission exclusive games like the console manufacturers. That way they can get exclusives for multiple franchises. $200m for an exclusive would get them 180 exclusive titles for the equivalent of buying EA for $36b.
    edited May 21 Alex1NviclauyycrundhvidBeatsbyronldewmejony0elijahg
  • Reply 10 of 46
    danvmdanvm Posts: 1,250member
    Beats said:
    The main reason Apple would have rejected EA is that less than 20% of EA's game catalog runs on Macs or iOS. Why would Apple want games that are almost entirely made for Windows, Xbox, Nintendo, PlayStation and Android?

    Market cap of EA is $36B. So they were probably asking $50B.


    Because the future. Why do people have a hard time seeing the possibilities of the future?

    This only makes it a better deal. This would mean Apple could port the 80% of games that aren’t on Mac and cause a snowball effect.

    If EA was a Mac exclusive developer, what would Apple gain?

    I’m not suggesting it would be a good acquisition, just saying this is a good reason. 
    I don't think Apple would make EA an exclusive developer / publisher.  Even companies like MS and Sony had to kept their latest (future) acquisitions multiplatform (CoD / Destiny).  Even Apple had to open Apple Music and ATV+ to other platforms so they could grow.  I think they would do the same with EA.
    edited May 21 viclauyyc9secondkox2byronl
  • Reply 11 of 46
    XedXed Posts: 1,449member
    The main reason Apple would have rejected EA is that less than 20% of EA's game catalog runs on Macs or iOS. Why would Apple want games that are almost entirely made for Windows, Xbox, Nintendo, Playstation and Android?

    Market cap of EA is $36B. So they were probably asking $50B.
    How quickly we forget that Bungie's Halo was demoed at MacWorld Expo in 1999 as the game that will pull gamers into the Mac before MS bought the entire company for $30M after Jobs turned them down. Note they went to Apple first to get bought.

    Then a lot of work had to go into making Halo work on the Xbox that would launch 2 years later. How much as the Halo franchise taken in? It's almost as if reworking a great game concept for their platform was financially viable for them.


    williamlondonviclauyycbyronlelijahg
  • Reply 12 of 46
    9secondkox29secondkox2 Posts: 1,223member
    Apple should do this. EA is huge with fantastic IPs. 

    That would provide Apple with tremendous leverage in the gaming scene and plug the only hole Macs have. 

    Mass Effect
    F1
    Dragon Age
    Fifa
    Need for Speed
    Titanfall
    Battlefield
    Command and Conquer
    Dead Space
    Numerous Star Wars games

     Etc etc etc

    its a treasure trove. 

    The Bungie acquisition gave Microsoft the must-have it needed back when. 

    This would do that for Apple. 

    Apple Arcade is crap. Sorry. It’s a joke. It’s the same as not even trying. Just a way to get recurring payments from people who don’t buy games much. In the beginning, it was a way to focus on higher quality mobile games. But now it’s just a subscription tier for the same old crap. 

    Apple has the ecosystem, hardware, software, APIs,  and trusted brand to dominate the gaming industry. 

    Focus on M2 Pro based “Apple Arcade” console (or have a new Apple TV+Arcade higher tier device), Mac and iOS and then port the games to third party console and pc a few months later. Create movies and tv series with these IPs and feature them on Apple TV+. It’s a business that wouldn’t be denied. So much potential here. 


    edited May 21 williamlondonBeatsbyronlelijahg
  • Reply 13 of 46
    danvmdanvm Posts: 1,250member
    Apple should do this. EA is huge with fantastic IPs. 

    That would provide Apple with tremendous leverage in the gaming scene and plug the only hole Macs have. 

    Mass Effect
    F1
    Dragon Age
    Fifa
    Need for Speed
    Titanfall
    Battlefield
    Command and Conquer
    Dead Space
    Numerous Star Wars games

     Etc etc etc

    its a treasure trove. 

    The Bungie acquisition gave Microsoft the must-have it needed back when. 

    This would do that for Apple. 

    Apple Arcade is crap. Sorry. It’s a joke. It’s the same as not even trying. Just a way to get recurring payments from people who don’t buy games much. In the beginning, it was a way to focus on higher quality mobile games. But now it’s just a subscription tier for the same old crap. 

    Apple has the ecosystem, hardware, software, APIs,  and trusted brand to dominate the gaming industry. 

    Focus on M2 Pro based “Apple Arcade” console (or have a new Apple TV+Arcade higher tier device), Mac and iOS and then port the games to third party console and pc a few months later. Create movies and tv series with these IPs and feature them on Apple TV+. It’s a business that wouldn’t be denied. So much potential here. 


    I don't know if I could say that Apple has a ecosystem when they don't even have a controller.   

    Also, I don't think the M2 would do something in the gaming market.  The switch is evidence that you don't need the most powerful device to win in the gaming market.  If Apple decide to enter the gaming market, will it compete with Nintendo or MS / Sony?  

    And here is another issue, upgradability.  Will Apple allow gamers to upgrade their devices?  One of the things PC gamers value is upgradability, and Apple is terrible at this.  

    My point is that acquiring / merging with EA would be one of many things Apple need to do enter the gaming market.  
    viclauyyc9secondkox2byronlelijahg
  • Reply 14 of 46
    mpantonempantone Posts: 1,795member
    Some people here are overly focused on the narrow context of PC vs. Mac gaming. That war is over.

    In fact, the industry is already looking beyond mobile games operating locally on the device.

    Let's imagine one day that someone could download a cloud gaming app (for fun, let's pretend that it's called GeForce NOW) onto a smart TV or their smartphone, pair a gamepad via Bluetooth, and play some of the most popular videogames on a 60"+ OLED display. When do you think that moment would come? Next year? Ten years from now? Last year?

    It's not about acquiring PC game IP and porting them to macOS.

    And let's not forget that more people play videogames on consoles than computers. A hybrid portable/console called Nintendo Switch has sold over 110 million units. The console gaming industry has dwarfed the PC gaming industry for over three decades. How many people were playing videogames on PCs in 1993 versus Super NES?

    For a while I thought that videogame consoles might make a brief interim appearance as plug-in devices like a Roku Streaming Stick. Now I'm not even sure of that. At some point, PlayStation, Xbox, and Nintendo may just end up being apps on your phone.
    byronl
  • Reply 15 of 46
    bulk001bulk001 Posts: 690member
    LBeats said:
    EA gets worst company in the world award often, sometimes twice in a row. They better offer a good deal.

    With that said, it’s long overdue Apple acquire a game studio. Doesn’t even have to be a multi-billion dollar one. Acquire a small indie studio, Apple has the funds to develop all their ideas.
    Apple barely delivered the Apple Watch 7. They haven’t delivered a car or VR headset. They can’t even get new screens made and remember that charging pad? Yeah, me neither. They can’t seem to keep talent either. If it is not an iterative iPhone, headphone or computer they haven’t done much of anything. As for software, by their own admission (via their response to an open letter on FCP to do better) they haven’t delivered much there either and Logic Pro is again just an iteration for the most part. Siri is still largely useless for me. My kids have me ask it questions just to get the most ridiculous answers much to their amusement. Don’t know anything about the EA CEO but if he is a creative type he would balance Cook’s lack of imagination and vision (but has delivers great shareholder returns) and maybe be able to get the company to actually deliver on new products. 
    Xedctt_zhwilliamlondonmac daddy zeebyronlelijahg
  • Reply 16 of 46
    mpantonempantone Posts: 1,795member
    bulk001 said:
    LBeats said:
    EA gets worst company in the world award often, sometimes twice in a row. They better offer a good deal.

    With that said, it’s long overdue Apple acquire a game studio. Doesn’t even have to be a multi-billion dollar one. Acquire a small indie studio, Apple has the funds to develop all their ideas.
    Apple barely delivered the Apple Watch 7. They haven’t delivered a car or VR headset. They can’t even get new screens made and remember that charging pad? Yeah, me neither. 
    Apple will only ship hardware when it can meet their fat gross margin threshold.

    Quarter after quarter when their fiscal results are announced, smarter people keep a close eye on GM.

    One thing we know about the Apple VR headset. It won't come with a 5-10% GM. Neither will the Apple Car.
    williamlondonBeatsbyronl
  • Reply 17 of 46
    michelb76michelb76 Posts: 386member
    Interesting. Trying to sell a gaming company to a company that doesn't care at all about gaming.
    williamlondon
  • Reply 18 of 46
    crowleycrowley Posts: 10,143member
    Xed said:
    The main reason Apple would have rejected EA is that less than 20% of EA's game catalog runs on Macs or iOS. Why would Apple want games that are almost entirely made for Windows, Xbox, Nintendo, Playstation and Android?

    Market cap of EA is $36B. So they were probably asking $50B.
    How quickly we forget that Bungie's Halo was demoed at MacWorld Expo in 1999 as the game that will pull gamers into the Mac before MS bought the entire company for $30M after Jobs turned them down. Note they went to Apple first to get bought.

    Then a lot of work had to go into making Halo work on the Xbox that would launch 2 years later. How much as the Halo franchise taken in? It's almost as if reworking a great game concept for their platform was financially viable for them.
    Halo was never a Mac exclusive, and the Xbox was not massively different architecturally from a Windows PC.  It used DirectX!

    More pertinently Microsoft are estimated to have paid $20-40m for Bungie.  That's million.  A completely different scale from what EA would cost, chump change for Microsoft

    Obviously Apple wouldn't have been interested in EA.
  • Reply 19 of 46
    DAalsethDAalseth Posts: 2,037member
    Apple Arcade is crap. Sorry. It’s a joke. It’s the same as not even trying. Just a way to get recurring payments from people who don’t buy games much. In the beginning, it was a way to focus on higher quality mobile games. But now it’s just a subscription tier for the same old crap. 
    I’m inclined to agree. I’ve subscribed three times, I want it to be good. But each time I play what’s there, what’s new, what looks good, and then drop it. Last December I stopped going in there after a week. All I found were games I wasn’t interested in, and games that I had bought previously and had just been put on AA to milk them a bit longer. ATV+ can at least argue that while their catalog is small the quality is good. AA can’t even claim that.
    edited May 22 williamlondonBeatselijahg
  • Reply 20 of 46
    hammeroftruthhammeroftruth Posts: 1,181member
    crowley said:
    Xed said:
    The main reason Apple would have rejected EA is that less than 20% of EA's game catalog runs on Macs or iOS. Why would Apple want games that are almost entirely made for Windows, Xbox, Nintendo, Playstation and Android?

    Market cap of EA is $36B. So they were probably asking $50B.
    How quickly we forget that Bungie's Halo was demoed at MacWorld Expo in 1999 as the game that will pull gamers into the Mac before MS bought the entire company for $30M after Jobs turned them down. Note they went to Apple first to get bought.

    Then a lot of work had to go into making Halo work on the Xbox that would launch 2 years later. How much as the Halo franchise taken in? It's almost as if reworking a great game concept for their platform was financially viable for them.
    Halo was never a Mac exclusive, and the Xbox was not massively different architecturally from a Windows PC.  It used DirectX!

    More pertinently Microsoft are estimated to have paid $20-40m for Bungie.  That's million.  A completely different scale from what EA would cost, chump change for Microsoft

    Obviously Apple wouldn't have been interested in EA.
    Yep. 

    From my recollection, Bungie wasn’t trying to sell itself. In an interview with a gaming magazine, the CEO answered why they decided at close to the last minute to sell their company and the exclusive rights to Halo to Microsoft. The answer was they offered a boatload of money.  Bungie was a Mac first game company before Myth II was released. 

    The other thing a lot of people don’t know is Halo was designed to be a multiplayer game at the beginning, and had references to one of their most popular Mac games, Marathon. 
    DaRev
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