EA Spent $21 Million on Failed Pursuit of Take-Two

[DoctorFinger]

I know it's fashionable to bash Electronic Arts, and this story is just going to juve the haters some more ammunition.

Variety took a look at EA's most recent financial statement - the one in which they announce the layoffs of 6% of their workforce - that they spent $21 million on "Certain abandoned acquisition-related costs." Which translated means all the lawyers, analysts and advisors who worked on the failed bid to acquire Take-Two Interactive. While costs like that are not unheard of in Wall Street circles, it is not a good sign in this economy.

In other news from that financial report, Videogaming 247 (http://www.videogaming247.com/2008/10/31/rumour-spielberg-team-laid-off-at-eala/) is reporting that "almost everyone" on the team developing Steven Speilberg's ultra realistic game - codenamed LMNO - have been laid off at EA. No word on the fate of this game, but it doesn't look good.

Sources - Variety (http://weblogs.variety.com/the_cut_scene/2008/10/ea-spent-21-mil.html); VG247 (http://www.videogaming247.com/2008/10/31/rumour-spielberg-team-laid-off-at-eala/).

[Shadowstorm]

$21 million dollars?

[Goronmon]

$21 million dollars?That a question from the Department of Redundancy Department?

[Bingley Joe]

I know it's fashionable to bash Electronic Arts, and this story is just going to juve the haters some more ammunition.


Yo! Juve me up some more of that ammunition, hater -- I'ma wiggwaggin' me some EA failed-takeover bidnez today, and you know it's sweet!

[Xerxes]

That's about enough to fund two major projects right. Maybe even a few casual products.

[Johan]

In other news from that financial report, Videogaming 247 (http://www.videogaming247.com/2008/10/31/rumour-spielberg-team-laid-off-at-eala/) is reporting that "almost everyone" on the team developing Steven Speilberg's ultra realistic game - codenamed LMNO - have been laid off at EA. No word on the fate of this game, but it doesn't look good.

LMNO = Laughing My Nuts Off? Except, lay-offs aren't funny. :(

EA probably blows a few million a year on coffee for corporate...I don't think this is any big deal, really. Sure, it's millions...but it is, after all, a cost of doing business. Not all acquisitions work out, but you still investigate them when they seem to make sense.

[Talanvor]

Juve? Wow, your fingers must be all freaky to get that particular... layout.

[Talanvor]

Yo! Juve me up some more of that ammunition, hater -- I'ma wiggwaggin' me some EA failed-takeover bidnez today, and you know it's sweet!

Oh wait, I know! It's new shorthand for just and give. Doc Finger's one of the cool kids! :D

[Xerxes]

I thought Stevie Spielberg had a 3 game deal with EA.

[Codicier]

While costs like that are not undeard of in Wall Street circles, it is not a good sign in this economy.

I've deard that. :D

[Purple Santa]

Not all acquisitions work out, but you still investigate them when they seem to make sense.

Interesting point. Would be interesting to compare this failed cost of acquisitions to other companies that might be relevant in a comparison.

All this and the "rumors" of Dead Space not selling well. Not a fun time at EA financial wise.

[Rich Richards]

That's about enough to fund two major projects right. Maybe even a few casual products.

Modern titles cost more then this... one game at EA is at least 25 million or so, assuming it's a AAA title.

[Telefrog]

I thought Stevie Spielberg had a 3 game deal with EA.

With the sales of Boom Blox, I'm sure EA isn't banging down his door demanding another game right now.

[Xerxes]

With the sales of Boom Blox, I'm sure EA isn't banging down his door demanding another game right now.

Well, it was an obscure-ish kind of game. And being third party on Wii helps no one. They should have seen that coming. Other folks were probably like me looking to see if he could bring anything special to interactive story-telling.

[johnperkins21]

All this and the "rumors" of Dead Space not selling well. Not a fun time at EA financial wise.

Wait. Dead Space isn't selling well? Why the hell not? It's a great game.

[Xerxes]

Wait. Dead Space isn't selling well? Why the hell not? It's a great game.

They don't know how to hype a game. Madden sells on name alone. If they called it EA's Prime Time Football, it would probably would fail. :rolleyes:

[Disgustipated]

$21 million dollars?

Your high school education is being put to good use, I see.

[Variable Gear]

We must all collect money to help EA buy Take-Two. It's for the best.

[Purple Santa]

Wait. Dead Space isn't selling well? Why the hell not? It's a great game.
I had "rumors" in my sentence :). It's not fact. Just I have read that in a few other websites...if it's true, it's a good question why. Many theories are abound though...
They don't know how to hype a game. Madden sells on name alone. If they called it EA's Prime Time Football, it would probably would fail. :rolleyes:
That's a bit harsh and offbase. If EA couldn't market games how did they become the huge publisher they are? It's not all due to Madden. Or the Sims. Did they not market Dead Space well enough? That could be discussed. I'm curious to know what others think on that. Was Dead Space marketed well?

[KingGorilla]

This acquisition failed long before GTA4. With the new board and management, the publisher that seems to only doll out mega hits like Oblivion, Civilization, Prey, Bioshock, was not going to turn over easily. Take 2 suffered because of corrupt officers, not anything wrong with the core of the company. Stockholders believed in the new leaders, and it has paid off. While Midway is looking at Bankruptcy, EA and Activision are trying to cope with the bloated monsters that they have bevome(how many rather large projects did Activision scrap this year?), Take 2 showed growth. Growth in this current market is a gigantic deal.

[Xerxes]

That's a bit harsh and offbase. If EA couldn't market games how did they become the huge publisher they are? It's not all due to Madden. Or the Sims. Did they not market Dead Space well enough? That could be discussed. I'm curious to know what others think on that. Was Dead Space marketed well?

I mean to the masses. I saw they sponsored the Thing on Hulu. But that's probably the only place I seen it. For a trilogy of items they could have advertised all three in one commercial. I didn't know about the graphic novel or movie until I heard it from Spigot. The only major hype has been from Fits' mouth. I could be wrong on that, but I can't think of any EA game getting overwhelming marketing. I was wrong about Madden because they have stores that stay open over night and put those posters up in most stores.

[Xerxes]

This acquisition failed long before GTA4. With the new board and management, the publisher that seems to only doll out mega hits like Oblivion, Civilization, Prey, Bioshock, was not going to turn over easily. Take 2 suffered because of corrupt officers, not anything wrong with the core of the company. Stockholders believed in the new leaders, and it has paid off. While Midway is looking at Bankruptcy, EA and Activision are trying to cope with the bloated monsters that they have bevome(how many rather large projects did Activision scrap this year?), Take 2 showed growth. Growth in this current market is a gigantic deal.

EA probably could have bought Midway with $21 million. :rolleyes:

[Raen]

I think I've seen one advert for Dead Space, it's set to the background of some website although I can't remember which. I don't think I've seen ads for it in any comics that I've picked up, which is generally a pretty good place to start. Certainly haven't seen any adverts on TV. But then again I generally find that video games in general don't do a good job of advertising outside of the gaming press. I don't know what it's like in the US, but I rarely see adverts for games on TV or before movies etc...

[Purple Santa]

EA probably could have bought Midway with $21 million. :rolleyes:

True....but why would they want to do that???

[Variable Gear]

True....but why would they want to do that???
Why would any publisher want to do that? Midway sucks.

[DoctorFinger]

Eh. All of Midway's problems aside, Mortal Kombat alone is worth more than $21M.

[Xerxes]

Eh. All of Midway's problems aside, Mortal Kombat alone is worth more than $21M.

I was thinking that as well. I'm sure Midway would actually fetch a pretty penny. Although their backlog looks like crud. :(

[Purple Santa]

Eh. All of Midway's problems aside, Mortal Kombat alone is worth more than $21M.

I'd like to see your accounting figures on that ;).

[Xerxes]

I'd like to see your accounting figures on that ;).

Brand recognition alone.