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Report: EA In 'Late Stages' Of $1B PopCap Acquisition

Major publisher Electronic Arts is in "late stage" discussions to acquire Seattle-based Plants vs. Zombies developer PopCap for $1 billion, according to an unconfirmed report citing anonymous sources.
Major publisher Electronic Arts is in "late stage" discussions to acquire Seattle-based Plants vs. Zombies developer PopCap for $1 billion, according to an unconfirmed report citing anonymous sources. AOL-owned TechCrunch on Wednesday night claimed that two sources had named Redwood City, CA-based EA as PopCap's buyer. Neither EA nor PopCap have offered a confirmation of the deal. If the unconfirmed report turns out to be true (other reports have cast doubt on the plausibility of such a deal) a $1 billion price tag would substantially overshadow EA's 2009 acquisition of social game developer and Pet Society maker Playfish, which the publisher bought in a deal worth up to $400 million. $1 billion also represents over 13 percent of EA's market cap, the report pointed out. A PopCap buy would be part of EA's attempt to gain a greater foothold in online markets -- or as TechCrunch put it, a "Hail Mary pass from EA to break into mobile and social gaming." PopCap reportedly brings in annual revenues of $100-150 million. Social game giant Zynga, which has made a string of acquisitions over the last several months, also reportedly looked into a PopCap buy. PopCap recently said that it could go public as early as November this year. CEO Dave Roberts said in May, "We are very much in the process of preparing a listing." "... Whenever you [talk about filing] an [IPO], you’re pretty much guaranteed that someone will come and try to buy you," he said at the time. "Our goal is not about an exit at PopCap. It’s about creating this legacy of games that mean as much as Monopoly and Scrabble to the world." As new online business models continue to supplement -- and in some cases supplant -- physical retail models, EA has been making moves towards adopting a broader digital strategy. EA CEO John Riccitiello said in May that the publisher is switching from a "defensive" strategy of cost cutting to a more "offense"-based strategy that will focus on highlighting the company's stable of owned IP, as well as a focus on talent acquisition. Gamasutra has contacted both PopCap and EA for comment.

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