Spare $1 billion? Why not buy PopCap?

In news so unexpected I had to blink and re-read it twice, PopCap Games is apparently in the process of being acquired. That’s what we’re hearing. What we’re not hearing is how much this all costs, and – crucially – who’s splashing the cash.

PopCap Games

Cha-ching?

Reports are floating around about the potential price tag: PopCap annual revenues are reportedly around $100-150 million, with multiple sources stating the company snagged a 10x multiple. That means the casual games company potentially sold for more than $1 billion – meaning the buyer is someone with fairly deep pockets.

Two obvious choices spring to mind, and we’re not sure which one gamers would be more happy with.

First off: Zynga. Over the past year, the FarmVille developer has snapped up a bunch of smaller game companies to add to its growing empire. Apparently, Zynga has indeed been sniffing around about a potential buy-out, but last reports had the company unhappy with the price PopCap was looking for.

The second obvious choice: EA. It’s a major company which has access to that sort of money, and a history of buying developers who work well in markets it’s hoping to break into. We all know that EA has its sights set on the mobile/casual market, look at Playfish, which it bought two years ago for $400 million, and the recent acquisition of Firemint. Whether or not EA would spend that much cash on just one company though remains to be seen.

Unpleasant Horse plans his next move

Unpleasant Horse, from PopCap studio 4th & Battery

There is also a third, darker horse in this race however. It comes from Asia, and could be one of a number of companies from that region trying to break into the lucrative western gaming market. Tencent is just one name being bandied about by [surl=http://techcrunch.com/2011/06/22/popcap-games-to-be-acquired-for-1-billion/]TechCrunch[/surl].

One thing’s for certain though – acquiring major video game companies isn’t like a silent auction – the buyer’s identity will be revealed sooner or later – so it’s a matter of wait and see.


This story was featured in Episode 19, Season 2 of playerattack News:

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