The Mobile Gaming Gold Rush: EA Buys Warner Bros.' Playdemic For $1.4 Billion

Author

Sreyasha Ghosh

Date

Jun, 24.2021

Electronic Arts has acquired mobile game studio Playdemic from Warner Bros. Games and AT&T's WarnerMedia for $1.4 billion in cash. "This is the next step building on our strategy to expand our sports portfolio and accelerate our growth in mobile to reach more players around the world," said Andrew Wilson, CEO of EA.

    Electronic Arts this morning announced that it will pay $1.4 billion to buy Playdemic, a mobile gaming studio whose titles include "Golf Clash", from Warner Bros. This comes just months after EA paid $2.1 billion to buy Glu Mobile. It also resolves talk that not all of WB Games would get included in the Discovery merger. EA is aggressively strengthening its position in the $138.4 billion video game market.

• Completed its $1.2 billion acquisition of British racing game developer Codemasters in February.

• Generated $1.62 billion in revenue from its Ultimate Team offerings in FY2021, according to the company's latest 10-K document filing.

• Completed its $2.1 billion purchase of developer and publisher Glu Mobile in April.

Console game makers are moving hard toward mobile. Some of that is adapting existing franchises, like what Activision Blizzard has done with "Call of Duty" or what Ubisoft plans for "Division", but much of it will be inorganic via acquisition.

• "Everybody wants a bigger footprint in mobile and moving more into games-as-a-service" Axios Gaming's Stephen Totilo explains.

• There are tons of mobile gaming studios that are ripe for the taking, both VC-backed and bootstrapped.

• At the same time, some mobile game companies are diversifying into console games, creating acquisition opportunities in that market too.

    Despite expanding its offerings, EA's spending spree led to a fiscal Q4 2021 that fell short of expectations. The "Madden" and "FIFA" publisher generated $1.34 billion in revenue in Q4 compared to $1.38 billion for the same period a year before. Its full-year revenue was stagnant at $5.6 billion - the same as fiscal year 2020.

    Consoles are a relatively limited market. But almost everyone in the world has a mobile gaming device in their pocket. So, welcome to the mobile gaming gold rush.