The shares of the game publisher Electronic Arts rose by up to 16 percent in the wake of takeover speculation by Amazon and increased the value of the company.
Electronic Arts (EA) stock was up as much as 16 percent in early trading on Friday. The reason was takeover speculation by Amazon. However, it later turned out that the information published in the media was based on unverified sources. Amazon and EA have so far declined to comment on the reports.
Takeover speculation increased valuation of EA
The rumor that Amazon could announce a takeover bid from EA on Friday has given the “FIFA” publisher a valuation of $37 billion, according to a Bloomberg report. Accordingly, USA Today published a message from its content partner GLHF – a website for gaming and e-sports – with the takeover speculation.
The USA Today report was questioned by a CNBC reporter after it was published – USA Today subsequently declared that the story “violated our editorial standards regarding the use of uncredited and unverified sources” and removed the wording about an upcoming one Announcement of Amazon takeover bids, Bloomberg reports.
Amazon Game Studios has stiff competition
In recent months there has been speculation about EA, which has long been traded as a takeover candidate. In addition to Amazon, Apple and Walt Disney were also named as potential buyers. Amazon has been offering free games for the PC in connection with the Prime subscription on its streaming service Twitch, which it acquired in 2014, since 2018. In 2019, Amazon announced its first PC game – the MMO role-playing game “New World”.
Speculations about a takeover by Amazon are not all that far off the mark, especially since Microsoft recently strengthened its position with Activision Blizzard for 69 billion dollars – the takeover is not yet complete, however. Sony also broadened its horizons this year by acquiring former Halo developer Bungie for $3.7 billion, the purchase closing last month. Most recently, longtime Amazon manager and boss of the largely unsuccessful Amazon Game Studios, Mike Frazzini, left the company.
Future of EA – without “FIFA” and FUT loot boxes
The future of EA could also depend not insignificantly on the “FIFA” franchise, with which the company made 1.62 billion US dollars in the past financial year just from the loot boxes for the FIFA Ultimate Team (FUT), which were controversial in the football game, according to Bloomberg. Dollars – sales of the game are not included.
However, 20 European consumer protection organizations recently called for regulation of loot boxes in video games. In Belgium, EA has already given in to pressure from the authorities and no longer offered so-called FUT microtransactions in 2019, in the Netherlands a fine imposed on loot boxes was lifted this year. The far bigger problem is likely to be the separation from the “FIFA” license, without which EA will have to do from 2023 – “FIFA” will be called “EA Sports FC” in the future. This should also fall in the value of Electronic Arts.
(bme)
