Comments on: On EA’s Acquisition of Playfish http://www.edery.org/2009/11/on-eas-acquisition-of-playfish/ For those interested in the business of making great video games. Entrepreneurial spirit a must. Wed, 08 Feb 2012 08:07:36 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: David J Edery http://www.edery.org/2009/11/on-eas-acquisition-of-playfish/comment-page-1/#comment-269348 David J Edery Sun, 15 Nov 2009 13:48:45 +0000 http://www.edery.org/?p=1284#comment-269348 I'd be surprised if EA didn't intend to leverage its IP via Playfish, but I'd personally guess that's a strong secondary reason for the purchase. I’d be surprised if EA didn’t intend to leverage its IP via Playfish, but I’d personally guess that’s a strong secondary reason for the purchase.

]]> By: Christine http://www.edery.org/2009/11/on-eas-acquisition-of-playfish/comment-page-1/#comment-269344 Christine Sun, 15 Nov 2009 13:19:21 +0000 http://www.edery.org/?p=1284#comment-269344 All good points. Do you think having EA's legal expertise and/or working on ironclad IP will change the dynamic for Playfish? Or is this really just a numbers game for active user base? All good points. Do you think having EA’s legal expertise and/or working on ironclad IP will change the dynamic for Playfish? Or is this really just a numbers game for active user base?

]]> By: Patrick http://www.edery.org/2009/11/on-eas-acquisition-of-playfish/comment-page-1/#comment-269119 Patrick Tue, 10 Nov 2009 18:28:32 +0000 http://www.edery.org/?p=1284#comment-269119 Somehow this reminds me of all the people buying AMZN after it gapped up to all-time highs at the peak of a rally driven by government funny-money, you know what I mean? Its like paying a quarter billion to avoid having to do your homework. Somehow this reminds me of all the people buying AMZN after it gapped up to all-time highs at the peak of a rally driven by government funny-money, you know what I mean? Its like paying a quarter billion to avoid having to do your homework.

]]> By: Kim http://www.edery.org/2009/11/on-eas-acquisition-of-playfish/comment-page-1/#comment-269116 Kim Tue, 10 Nov 2009 17:50:19 +0000 http://www.edery.org/?p=1284#comment-269116 I blogged a short note about this here: http://www.kimpallister.com/2009/11/ea-buys-playfish.html Yes, in short they bought the IP, the user base, the revenue stream, and the expertise. In fact, the structure of the acquisition hints at the above. The earnout is partly to retain talent and partly to make sure they hit the revenue numbers ongoing (which is in turn related to retaining the user base, etc). The stock part of the deal is related to retaining talent. As to whether they overpaid or not, we'll never really know. Whether it turns out to be a successful piece of their business or not is immaterial to whether they overpaid. I blogged a short note about this here:

http://www.kimpallister.com/2009/11/ea-buys-playfish.html

Yes, in short they bought the IP, the user base, the revenue stream, and the expertise.

In fact, the structure of the acquisition hints at the above. The earnout is partly to retain talent and partly to make sure they hit the revenue numbers ongoing (which is in turn related to retaining the user base, etc). The stock part of the deal is related to retaining talent.

As to whether they overpaid or not, we’ll never really know. Whether it turns out to be a successful piece of their business or not is immaterial to whether they overpaid.

]]>