Before Microsoft announced a deal with Activision Blizzard, EA was apparently interested in a merger.
News broke over the weekend that Electronic Arts was looking to strategically combine into an even larger entertainment juggernaut. They reportedly pursued mergers with Amazon, Apple, Disney, and NBC Universal.
There’s one company that caught our attention though: Activision Blizzard. According to an industry analyst, EA was interested in combining with the Call of Duty publisher. This was prior to Microsoft’s announced acquisition of Activision Blizzard for $68.7 billion.
“EA also likely pursued a merger with Activision last year, reading into recent filings related to the pending Microsoft deal,” Baird analyst Colin Sebastian says. “But since that didn’t work out, it would not surprise us if EA later pursued conversations with other companies mentioned in the media reports.”
“While a merger makes some strategic sense (and could be the best long-term option), we believe EA can stand on its own as an independent game publisher with a diverse portfolio of console, PC, and mobile games. In particular, FIFA (soon FC) and Apex Legends are tent-pole franchises, along with Sims, Madden, Battlefield, and Star Wars, among others,” he adds.
Industry consolidation
Of course, the merger would have faced regulatory scrutiny as two of the largest gaming publishers merging into one mega-publisher would start to resemble monopoly-like power. But this is the direction that the industry is going as EA bought Glu Mobile, Playdemic, and racing game powerhouse Codemasters in recent years.
Just this year, Take-Two Interactive acquired Zynga in a $12.7B deal. Meanwhile, Sony is buying Destiny developer Bungie in a multi-billion dollar deal that looks to lock in exclusives for the PlayStation brand. Microsoft has purchased a host of studios in recent years as well as it is trying to secure exclusive content for Xbox Game Pass.
