Rumor: MS is looking into acquiring EA

[Mcmasters]

It would be very good for Microsoft if they owned EA. It would be very good for Microsoft if they owned EA, Activision, Take-Two, Nintendo, and Sony. It would be very good for Microsoft if they owned every game developer and publisher on Earth.

But that's not the question. The question is whether it makes sense for Microsoft to spend 40-50 billion dollars to acquire EA. Or in other words, is it likely? The answer to that, it seems to me, is pretty clearly no. There are much better things for them to spend 40-50 billion on (assuming they are willing to spend that much just to bolster their gaming division).

You don't really explain how such an acquisition would be bad however. You just state that its bad.

It isn't likely seeing as it would take years to recoup the ROI from such a hefty purchase, however, EA does have a stable, healthy and attractive stable of games that would indeed bolster Microsoft gaming division with a very impressive portfolio. So again, I ask, how would it be bad? Genuine question.

To retain so many titles to include in your franchise portfolio (simply licensed or otherwise) is a positive.

People also thought the recent gamepass announcement was a bad idea as it would cut down on initial sales of their first party games. Now, people are beginning to see the end game and play nice.

 

[JinCA]

 

[Andy]

You don't really explain how such an acquisition would be bad however. You just state that its bad.

It isn't likely seeing as it would take years to recoup the ROI from such a hefty purchase, however, EA does have a stable, healthy and attractive stable of games that would indeed bolster Microsoft gaming division with a very impressive portfolio. So again, I ask, how would it be bad? Genuine question.

No, I didn't explain, because we had already covered that (see earlier posts and linked articles). Besides, the question was just shifting the burden to me, rather than addressing what I had said, which was that no one had offered a credible rationale for why it was a good investment.

But briefly, 1) massive expenditure, (approx. 45 billion spent, in a division whose revenue is 9 billion a year); 2) if they made the games exclusive, they'd lose tens of billions of dollars -- tens of billions; 3) if, otoh, they didn't make the games exclusive, then that doesn't address the issue they have with exclusives; 4) a lot of EA's worth is attributable to licenses, 5) there's overlap in the two companies' game catalogs, so you'd have franchises competing with each other; and 6) there are much better ways to spend that amount of money -- such as acquiring a number of smaller, talented dev studios.

 

[JinCA]

No, I didn't explain, because we had already covered that (see earlier posts and linked articles). Besides, the question was just shifting the burden to me, rather than addressing what I had said, which was that no one had offered a credible rationale for why it was a good investment.

But briefly, 1) massive expenditure, (approx. 45 billion spent, in a division whose revenue is 9 billion a year); 2) if they made the games exclusive, they'd lose tens of billions of dollars -- tens of billions; 3) if, otoh, they didn't make the games exclusive, then that doesn't address the issue they have with exclusives; 4) a lot of EA's worth is attributable to licenses, 5) there's overlap in the two companies' game catalogs, so you'd have franchises competing with each other; and 6) there are much better ways to spend that amount of money -- such as acquiring a number of smaller, talented dev studios.

Get out of here with that common sense garbage! lol.

 

[Sasquatch Montana]

But briefly, 1) massive expenditure, (approx. 45 billion spent, in a division whose revenue is 9 billion a year)

Microsoft also inherits EAs cash reserves. In addition the new software would increase their revenue to at least 20BN per year.

2) if they made the games exclusive, they'd lose tens of billions of dollars -- tens of billions;

Sure if Playstation owners swore off EA games for all eternity. They'll just buy Xboxs instead. More likely the fact is Xbox becomes vastly more desirable over playstation because of these games. Its called being Dreamcasted.

Now that does make sense.

3) if, otoh, they didn't make the games exclusive, then that doesn't address the issue they have with exclusives

Well then consider it addressed.

4) a lot of EA's worth is attributable to licenses

And those licenses are paid up for another 5 years. EA makes a living off it.

Or are MLB and Spiderman poor investments for Sony?

5) there's overlap in the two companies' game catalogs, so you'd have franchises competing with each other; and

And Microsoft owning EA just makes it easier to organise the releases of software then they do as competitors.

6) there are much better ways to spend that amount of money -- such as acquiring a number of smaller, talented dev studios.

Which smaller studios have hits like battlefield, star wars, madden, fifa, titanfall ready and waiting for the plucking?

The price is high for a reason.

 

[Dno69]

So aquiring EA would be good for Microsoft, but bad for Microsoft? ok. Got it.

 

[OneBadMutha]

Odds are against any major acquisition happening because big acquisitions are hard. The Forbes article is idiocy though. Everything they said could’ve been said about Minecraft.

Microsoft could spend billions on studios, take 4 to 5 years to establish them all and not find another Halo. Actually the odds of system selling franchises are about as rare as drafting a Lebron type Superstar.

EA has those...and PC store. EA owns all the studios that make games for them. Microsoft would gain both IPs and established studios.

Purchase of EA isn’t expensed over 1 year. It’s expensed over many years where they’ll be still turning profits as a mulitplatiform developer and driving Game Pass. Every year that Game Pass is niche opposed to mainstream cost billions. Years where Microsoft can’t sell their games on PC because their PC store is trash cost them billions.

It’s not a risky or too expensive acquisition. It’ll be hard to pull off but not out of the question or unreasonable.

 

[Sasquatch Montana]

So aquiring EA would be good for Microsoft, but bad for Microsoft? ok. Got it.

The general consensus is if MS bought EA it would solve all their problems.

Studios. Yes. Games yes. Big games. HELL YES. Europe. FIFA. Japan. Don't mean s***. Upset Sony and Nintendo. Of course.

The sticky issue of debate is "is it worth 50 Billion"

Now Microsoft could take only 5 billion and in 8-10 years have almost as many big games and hey thus saved 45 billion.

Theres also a good chance they might only have 1 medium sized game and 9 or 10 failures.

Thats a risk. EA is not a risk. EA is simply expensive. Money is not a problem for Microsoft. They wrote off Nokia and didnt blink.

I guess its just a matter of whether you want to train for 3 years as a carpenter to carve furniture from 200 year old redwoods....or spend 2 hours in ikea.

Go Ikea. Put it on credit. Microsoft likes the flat pack approach.

 

[Edge BC]

If it's not EA, I wonder what it'll be. I'm just glad they're making moves tbh..

 

[yankeessuck]

They should just buy Sony. Solves all problems.

 

[Dno69]

I think everyone is getting a little chippy over something that probably won't happen. Sarcasm and smirky faces over simple discussion.
I personally think it makes a lot sense for Microsoft. Some disagree. That's fine.

 

[Dno69]

Would what's left of Bioware be worth buying? If MS buys individual studios.

 

[Sasquatch Montana]

Would what's left of Bioware be worth buying? If MS buys individual studios.

Depends how Anthem does. IMO they should have chased Bethesda...Fallout and Skyrim ended up being much bigger IP, but we only know that now in retrospect.

 

[karmakid]

They should just buy Sony. Solves all problems.

Then MC can join the MCU and be the one to kill off Thanos in the end with a sticky grenade.

Would what's left of Bioware be worth buying? If MS buys individual studios.

It could be a safe bet if they’re just looking for studios and keep a good relationship with EA

 

[Edge BC]

Would what's left of Bioware be worth buying? If MS buys individual studios.

I'd love to see that happen. Maybe that could get some of their talent that's left over the years to return.

 

[Andy]

I think everyone is getting a little chippy over something that probably won't happen. Sarcasm and smirky faces over simple discussion.

Oh no, not a smirky face!

Abandon all hope!

 

[Edge BC]

You really earned that one..

 

[OneBadMutha]

I think the summary is Microsoft is looking at everything...or they are sending out the messages to the gaming community that they are. If nothing else, I speculate that Microsoft wants all developers, publishers and the gaming market to be on notice. It’s not a coincidence these rumors leaked internally immediately after Spencer said they were shopping.

 

[Dno69]

Oh no, not a smirky face!

Abandon all hope!

The board is for discussion right? I didn't see anything over the top by anyone.

 

[OneBadMutha]

I think everyone is getting a little chippy over something that probably won't happen. Sarcasm and smirky faces over simple discussion.
I personally think it makes a lot sense for Microsoft. Some disagree. That's fine.

There’s no reason for anyone to get chippy over corporations playing monopoly. It’s fun to speculate. The consolidation of free markets in this country kind of sucks but none of us are going to stop it. It’s harmless fun to speculate.

 

[Andy]

The board is for discussion right? I didn't see anything over the top by anyone.

I've lost you. What are you talking about?

 

[Dno69]

I've lost you. What are you talking about?

I thought the discussion was pretty civil. As OBM said it's just fun speculation.

I didnt see the need for the condenscension directed at others. But its all good.

 

[Andy]

I thought the discussion was pretty civil. As OBM said it's just fun speculation.

I didnt see the need for the condenscension directed at others. But its all good.

I still don't know what you're talking about, because you're being very indirect. If you want to call me out for something specific, go ahead.

 

[Dno69]

I still don't know what you're talking about, because you're being very indirect. If you want to call me out for something specific, go ahead.

What point in Sasquaches post deserved the smirk? Not to harp on that, just curious. Was it the Dreamcasted line? Overall reputation?

And Jinca's common sense blast. I can see what you're saying, and it does make sense. I just think it makes sense for them to take the risk with the position that they've put themselves in regards to games and studios.

 

[Andy]

What point in Sasquaches post deserved the smirk? Not to harp on that, just curious. Was it the Dreamcasted line? Overall reputation?

Yeah, I thought that was what you were objecting to -- my use of a shifty face. That's why I used Elmo in hellfire -- I was poking fun at your low tolerance for conflict (also I saw that gif posted yesterday -- someone had said, "Do it Microsoft!", and then posted that gif ... I had laughed and was looking for an excuse to use it).

Anyhow, you're asking why I gave the shifty? A couple reasons, I suppose. I felt like his responses weren't really taking in the points so much as coming up with knee-jerk "yeah, but" comebacks. I didn't feel like spending the time addressing his post point by point, because it didn't seem worth the effort. And this isn't going to happen anyway, so what's the point. I've got better things to do. Like explaining my use of a shifty face.

 

[TDbank24]

So aquiring EA would be good for Microsoft, but bad for Microsoft? ok. Got it.

Well yeah. There's pros and cons to everything in life. Like having sex. Don't pull out and you'll get more than you bargained for.

 

[Dno69]

Well yeah. There's pros and cons to everything in life. Like having sex. Don't pull out and you'll get more than you bargained for.

TD, I think you nailed it. No pun intended.

 

[TDbank24]

Yeah, I thought that was what you were objecting to -- my use of a shifty face. That's why I used Elmo in hellfire -- I was poking fun at your low tolerance for conflict (also I saw that gif posted yesterday -- someone had said, "Do it Microsoft!", and then posted that gif ... I had laughed and was looking for an excuse to use it).

Anyhow, you're asking why I gave the shifty? A couple reasons, I suppose. I felt like his responses weren't really taking in the points so much as coming up with knee-jerk "yeah, but" comebacks. I didn't feel like spending the time addressing his post point by point, because it didn't seem worth the effort. And this isn't going to happen anyway, so what's the point. I've got better things to do. Like explaining my use of a shifty face.

Your Elmo gif was the inspiration for my post in the other thread. Can't take the heat get out the kitchen! We all want a better Microsoft and Sony beating up on that ass has given us a better Microsoft already. We wouldn't have things like BC and Game Pass or the mighty X itself if they didn't get humbled this gen.

 

[JinCA]

So aquiring EA would be good for Microsoft, but bad for Microsoft? ok. Got it.

How would it be good though? what's the benefit of spending double what the entire retail gaming industry makes in a year on one publisher who relies heavily on licensed content, much of which would be lost if they didn't keep those games multiplatform? As I've pointed out and Andy as well MS already has games that are a lot alike EA's biggest tittles, if anything they need to be looking at companies that would give their portfolio more diversity not just another shooter, fantasy RPG and racing game.

If they are solely looking at publishing games on all major platforms that's fine but still it would take many years to make the money back. EA made $4.8 billion in 2017, if MS paid what Andy is estimating they'd have to it would take far too long to see any financial benefit, it also means there is no chance of MS making EA games exclusive when spending that kind of money so anyone who thinks that's going to happen needs to step back and look at the reality of the situation.

 

[Dno69]

Yeah, I thought that was what you were objecting to -- my use of a shifty face. That's why I used Elmo in hellfire -- I was poking fun at your low tolerance for conflict (also I saw that gif posted yesterday -- someone had said, "Do it Microsoft!", and then posted that gif ... I had laughed and was looking for an excuse to use it).

Anyhow, you're asking why I gave the shifty? A couple reasons, I suppose. I felt like his responses weren't really taking in the points so much as coming up with knee-jerk "yeah, but" comebacks. I didn't feel like spending the time addressing his post point by point, because it didn't seem worth the effort. And this isn't going to happen anyway, so what's the point. I've got better things to do. Like explaining my use of a shifty face.

Thanks.

I didn't think his points were that bad. But yeah, its not happening which is why I didn't get the chippiness.

I don't know if such a deal would be good or bad. But it would be interesting .