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Why EA’s acquisition of Playfish is still a steal at $400 million
There’s no smoke without fire, they say, and the rumours of EA’s acquisition of Playfish would have stupefied all the bees in the US (not that there are any left, of course).
And today it was confirmed on Playfish’s blog that they had been acquired. The acquisition price is $275 million plus $25 million to retain top talent, plus an earnout of $100 million. Playfish is rumoured to be making $75 million in revenue in 2009.
Pretty impressive for a business that is two years old this month.
When the rumours first broke, I posted that $250 million for Playfish was a steal for six reasons:
- Social games are big and growing
- Playfish is an extremely successful games developer
- Playfish has lots of users
- Playfish is making a lot of money
- Playfish has great management
- Playfish will turn the EA supertanker, and benefit from EA’s strength
At $400 million, the points still stand. And EA has protected itself against the risk of overpaying by making $100 million contingent on performance over the next two years.
Massive congratulations to the Kristian Segerstrale and his team, and you can read my full analysis here.