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Electronic Arts Inc. will acquire Playfish Inc., a maker of games played on Facebook Inc.'s Web Site, for $400 million.
Electronic Arts is paying $300 million initially and up to $100 million if Playfish meets certain profit targets, the Redwood City, Calif.-based company said today in a statement.
The purchase is a bet that games played on social networks will be a driver of industry growth as sales of titles made for consoles have fallen 12 percent in the U.S. this year. The market for games made by Playfish and rivals including Zynga Inc. and Playdom Inc. will be $2 billion by 2012, nearly triple current levels, according to ThinkEquity LLC.
"Social gaming, with its emphasis on friends and community, is seeing tremendous growth and this is the right time to invest to strengthen our participation in this space," Barry Cottle, senior vice president and general manager of EA Interactive," said in the statement.
Playfish's most popular game, Pet Society, has more than 20 million monthly active users on Facebook.
Started in 2007 by Glu Mobile Inc. executives Kristian Segerstrale and Sebastien de Halleux, Playfish offers free-to- play titles and generates revenue by selling virtual goods to users through so-called microtransactions. The privately-held company, based in London and San Francisco, is backed by Accel Partners and Index Ventures.
Electronic Arts is paying $300 million initially and up to $100 million if Playfish meets certain profit targets, the Redwood City, Calif.-based company said today in a statement.
The purchase is a bet that games played on social networks will be a driver of industry growth as sales of titles made for consoles have fallen 12 percent in the U.S. this year. The market for games made by Playfish and rivals including Zynga Inc. and Playdom Inc. will be $2 billion by 2012, nearly triple current levels, according to ThinkEquity LLC.
"Social gaming, with its emphasis on friends and community, is seeing tremendous growth and this is the right time to invest to strengthen our participation in this space," Barry Cottle, senior vice president and general manager of EA Interactive," said in the statement.
Playfish's most popular game, Pet Society, has more than 20 million monthly active users on Facebook.
Started in 2007 by Glu Mobile Inc. executives Kristian Segerstrale and Sebastien de Halleux, Playfish offers free-to- play titles and generates revenue by selling virtual goods to users through so-called microtransactions. The privately-held company, based in London and San Francisco, is backed by Accel Partners and Index Ventures.
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