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Is Electronic Arts for sale?

According to unnamed sources, it looks like the publisher is exploring the possibility of being sold. Said sources, as reported by the New York Post, have stated that EA has been approached by private-equity companies KKR and Providence Equity Partners (owner of another big game company, Bethesda Softworks) about a possible sale.

So far, neither EA nor the two companies have commented on the report, but it begs the question: why? There are a few reasons, the simplest being that the publisher has been, like many of the big game companies, having a hard time adjusting to the rapid changes in the video game industry. As the industry continues to move away from traditional game and console distribution and into a more digital age, many who were slow to adapt are now trying to catch up; like EA, whose stock value has dropped 37 percent this year.

To that end, the publisher has been busy buying back shares, closing up yesterday at $13.09 a share. "They've made it known they'd do a deal at $20 a share," reported one source familiar with the company.

EA has a few things going against it. Aside from being slow to change with the times, sales of games and consoles in general has been decreasing somewhat, which has led to a steady decline that has been going on for months. This is due to the rising popularity of other types of games, like social games and free-to-play, as well as the convenience of games on other devices. "The handheld casual console market has evaporated because of tablets," said Michael Pachter, an analyst at Wedbush Securities.

Despite problematic times now, Pachter expects EA's troubles to turn around and its stock prices to rise. With more money being made off its digital games (like, say, SimCity Social) he foresees that the publisher's stock price will more than double within a year's time. The only problem, though, he said, is that EA and other more traditional companies are "in the fifth year of a three-year turnaround."

Interesting stuff, all this. If this story interested you, you may be intrigued by a similar report from last month involving Activision Blizzard and parent company Vivendi. Take a look at it through the link below.

Source: New York Post

Link: Vivendi courting Tencent, Time Warner, and Microsoft as possible suitors for Activision Blizzard

Peter Grimm A writer, journalist, and aspiring storyteller, Peter Grimm has been gaming since the days of the Nintendo 64, and reporting on the goings-on in the World of Gaming since late 2011. His base of writing operations is located within the void between Here and There, or so he would have you think.

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