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.
Internet and mobile services are expected to score against handheld video game players and satellite radio amid an economic recession, according to results from a Forrester Research survey released Monday.
According to the results, 51 percent of North America consumers surveyed said they planned to curtail technology spending in the coming year, due to the economy. And areas expected to take the greatest hit include handheld video game players, followed by satellite radio, smart phones, video game consoles, and portable GPS devices.
(Credit:
Forrester Research)
The report noted:
While no device is immune from consumer spending cuts, new devices such as satellite radios and handheld video game players are the most likely to be left off the priority list - two thirds of consumers, regardless of their previous intentions, said that they are less likely to purchase these two devices in a recession, while a scant 3 percent said that they are more likely.
The survey, which took the pulse of more than 5,000 consumers in North America during November, found that high-definition TVs were more resilient, with only half of those surveyed saying they were less likely to purchase an HDTV in the coming year. And 7 percent of survey respondents even noted they were more likely to buy an HDTV, Forrester noted.
But Internet, as well as mobile, services fared far better.
According to the report:
An evaluation of purchase intentions can determine which products consumers see as essential and which they consider a luxury, mobile phone and Internet service, for instance, remain steady, while momentum for newer products such as personal navigation devices and satellite radio will slow.
Among Internet users, 83 percent of survey respondents noted they have no plans to change their service and 2 percent indicated plans to increase their service. As for mobile phone users, 70 percent said planned to keep the status quo, with 2 percent noting plans to increase their service, according to Forrester.
But all services are not created equal. Premium cable services and landline phone services, for example, were deemed less essential to survey respondents, with 14 percent of those users cumulatively noting they may cancel or reduce their service.
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