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Electronic Arts (EA) Acquires Mobile Game Studio Playdemic

Electronic Arts EA has bolstered its mobile divisions with a new purchase. The video-game giant has acquired Playdemic Studio from Warner Bros. Games, part of WarnerMedia owned by AT&T T, for $1.4 billion in cash. The sale price for Playdemic, subject to customary adjustments, will be paid in cash at closing and retained by AT&T.

Founded in 2010, Playdemic is best known for Golf Clash, which is one of the leading mobile games in the United States and in the UK with over 80 million downloads globally.

According to Sensor Tower data, Golf Clash has generated more than $780 million to date from player spending and picked up 58 million downloads across the App Store and Google Play. In 2020, the title accumulated approximately $185 million in gross revenues in 2020 and recorded about 5.3 million in first-time downloads.

The acquisition of Playdemic is part of EA’s strategy to expand its sports gaming portfolio and reach more players worldwide. This acquisition will contribute to the development of EA's mobile portfolio, which includes over 15 live services for increasingly popular game genres, such as lifestyle, casual, sports and mid-core.

Electronic Arts Inc. Price and Consensus

Electronic Arts Inc. Price and Consensus
Electronic Arts Inc. Price and Consensus

Electronic Arts Inc. price-consensus-chart | Electronic Arts Inc. Quote

EA’s Aggressive Push to Beat Gaming Competition

Mobile has also become the biggest part of the video gaming market. Per App Annie report, consumers spent $1.7 billion per week in mobile in the first quarter of 2021 up 40% from pre-pandemic levels, while mobile game downloads grew 30%.

EA could use more help expanding in a space where other companies such as Supercell, Activision Blizzard’s King and Tencent are thriving. Market researcher, Newzoo anticipates mobile to account for $90 billion, or 52% of the overall $175 billion game market in 2021.

The deal is the third major acquisition EA has made in seven months, as it bought Glu Mobile for $2.4 billion in February and U.K.-based Codemasters for $1.2 billion in December. EA added more than 500 developers of mobile games with its acquisition of Glu and enjoys a sizable mobile game portfolio with titles like Star Wars: Galaxy of Heroes.

The gaming industry has also seen a series of acquisitions in the past few months, including Microsoft’s $7.5 billion acquisition of ZeniMax Media and Zynga’s ZNGA acquisition of Chartboost, a leading mobile programmatic advertising and monetization platform, following the buyout of Echtra Games in March.

Recently, Take Two Interactive TTWO acquired mobile games developer Nordeus to expand its sports portfolio with the first-ever soccer offering. The Playdemic deal will help EA in its competitive battle in golf, where it takes on Take-Two Interactive’s 2K label with PGA Tour 2K21.

EA is set to release Battlefield 2042, an innovative first-person shooter game on Oct 22. Moreover, it is expected to release FIFA 22 and F1 21 later this year.

This Zacks Rank #3 (Hold) company also announced that its golf game — EA Sports PGA Tour — is slated to release in spring 2022. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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