Microsoft Corp. on Thursday said it had no intentions to acquire Electronic Arts, a leading video game publisher. While the acquisition would allow Microsoft to grab numerous game franchises and make them exclusive for Xbox 360 and Windows-based personal computers, the deal would hardly provide adequate return on investment.
“We have no plans to acquire EA. They remain a very important partner to us. No acquisitions,” said Phil Spencer, corporate vice president of Microsoft Game Studios, in an interview with Reuters news-agency.
At press time market capitalization of Electronic Arts was $6.24 billion, which is a lot of money even for the world’s largest maker of software. The main reason behind success of Electronic Arts is very diverse portfolio of video games that are aimed at numerous game consoles as well as personal computers.
In case Microsoft acquires Electronic Arts, it will have to axe games for platforms like Sony PlayStation or Nintendo Wii in order to give Xbox 360 and Windows PC platforms advantages over competing systems. Nevertheless, dropping game development for competing systems will naturally reduce revenue of Electronic Arts dramatically. It is at least strange to buy a game publisher with the aim to reduce its earnings.
There are numerous media companies that may really be interested in acquiring a video game publisher. According to numerous reports, Time Warner, Viacom and Walt Disney are paying a lot of attention on the game industry.
“We do think that both Time Warner and Viacom are interested in the gaming space. While we won't be surprised by an offer for THQ, we believe that Take-Two Interactive Software could be a better take-out candidate,” said ThinkEquity analyst Atul Bagga, reports the Wall Street Journal.