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EA gets social with Playfish acquisition

by Sylvie Barak on 10 November 2009, 09:43

Tags: Electronic Arts (NASDAQ:EA), Facebook

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Quite a catch

After weeks of rumours, Electronic Arts has finally confirmed it has snagged Facebook games-maker Playfish for a whopping $400 million, giving massive validation to social networking's influence on the gaming industry.

Playfish, which will make a purported $75 million this year from a mixture of advertising partnerships and the sale of virtual turnips, is the second biggest games-maker on Facebook after Zynga, maker of those infuriating Mafia Wars and Farmville games.

London based Playfish offers 10 games to date - including facebook hits Country Story, Pet Society, and Restaurant City - and boasts an impressive 60 million users a month, enough to lure a plethora of sponsors eager to buy in-game upgrades for users' who agree to try their products.

Apparently, social not-workers are spending hours on the addictive Playfish games. Indeed, so involved are the players that many think nothing of coughing up a few dollars for a virtual bale of hay or a few extra chickens. Sounds more like Pay-Fish than Playfish to us.

The firm also seems to be reaping the benefits of a burgeoning trend in smartphone gaming, with Playfish already selling a game for the iPhone with two more said to be on the way.

And with smartphone adoption reaching unprecedented levels in the US, the boost to mobile gaming doesn't look like it will be falling flat anytime soon. In fact, mobile gaming seems to be pushing into an yet broader demographic of late, even managing to convert millions of teens who would have previously preferred to use a dedicated handheld gaming device.

EA is paying for its latest acquisition with $275 million in cash and another $25 million in equity retention arrangements, with Playfish entitled to an additional $100 million based on achieving certain performance milestones by the end of 2011.

Not bad for a virtual hot-dog seller. Playfish better just hope its crops don't wilt any time soon.



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Hahaha it's so funny reading this now.