Video game developer Electronic Arts announced on Monday that it has acquired social-gaming company Playfish, paying $275 million in cash and $25 million in "equity-retention arrangements." Playfish also is entitled to up to $100 million if it meets performance milestones by December 31, 2011.
EA also announced later Monday that it planned to eliminate 1,500 jobs, or about 17 percent of its workforce, as part of a plan to reduce annual costs by about $100 million.
The acquisition of Playfish falls in line with EA's desire to be more than just a developer for traditional gaming platforms, like consoles and the PC. The company said in a statement that the acquisition "strengthens its focus on the transition to digital and social gaming."
Thanks to the explosive growth of social networks and games made for those platforms, Playfish is enjoying strong performance in the social-gaming space. The company has more than 150 million games installed on several platforms, including Facebook, MySpace, the iPhone, and Android-based devices. According to Playfish, more than 60 million active players per month are playing titles. Its Facebook titles include Pet Society, Restaurant City, and Country Story--all three are among the most-popular games on the social network.
The EA Interactive division, which Playfish will join, has done a fine job of capitalizing on the trend of online and mobile gaming. That division includes Pogo, one of the top casual-gaming sites on the Web. The Mobile side of EA Interactive has captured 34 percent market share in the U.S. with the help of Madden NFL 10, The Sims, and Tetris.
Updated at 10:20 p.m. with details of job cuts.
Don Reisinger is a technology columnist who has written about everything from HDTVs to computers to Flowbee Haircut Systems. Don is a member of the CNET Blog Network, and posts at The Digital Home. He is not an employee of CNET. Disclosure.
Electronic Arts is delaying the release of its Harry Potter and the Half-Blood Prince video game until next summer so that it will coincide with the release of the film, which has also been postponed.
Shares of the game maker dropped by about 1 percent to $45.94 in after-hours trading on Monday.
Last month, Warner Bros. said that the release date for the sixth film in the series would be put off from November to summer 2009 because of after-effects of the writer's strike. (It said that production of the next two films in the series would not be delayed, however.)
The Rock Band game publisher put a positive spin on the new date in a press release Monday, saying that it will be more immersive than ever, with new Wii gestures. But the delay may change EA's immediate financial picture. The company had said it expected to generate $120 million in revenue and 13 cents a share in profit from the video game in the quarter it was to be released, according to Reuters.
Fans of Harry Potter author J.K. Rowling still have something to look forward to this year: the release of children's book The Tales of Beedle the Bard in December.
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