Apple Shows Increased Interest Towards Video Games

Apple Hires Microsoft Xbox Executive, Plans to Acquire Electronic Arts

by Anton Shilov
05/05/2009 | 09:17 AM

With $25.65 billion in cash, Apple is likely looking forward to enter new businesses or dramatically expand existing ones. Some analysts believe that Apple is in talks to buy Electronic Arts, the world’s second largest publisher of video games, in a bid to dramatically expand its influence on the lucrative market of gaming software and hardware.

 

On Monday it transpired that Apple had hired Richard Teversham, senior director of Xbox business insights and strategy at interactive entertainment division of Microsoft Corp. Mr. Teversham served at Microsoft Xbox division for about four years, based on his profile at LinkedIn, but it he officially told the press that his job at Apple would be related to education.

Guy Adami, the managing director of Drakon Capital, which delivers customized market analysis, said during CNBC’s Fast Money program on Monday that there was a “chatter” that Apple was “eyeing Electronic Arts as a takeover target.

In late April it also transpired that Apple had hired Robert Drebin, who was personally involved into creation of Flipper, and presumably, Hollywood graphics processors for Nintendo video game systems, as well as Raja Kodouri, a graphics and GPGPU (general-purpose computing on graphics processing units) specialist, from AMD.

All of those facts may not have any relation between themselves, however, they point out a rather important trend: the importance of graphics processing and video games is gaining at Apple and rather serious business moves may be just around the corner.

While the rumours regarding Apple’s intention to acquire Electronic Arts, in the light of the fact that Apple recently hired two graphics technologies specialists from the former ATI Technologies (now graphics products group of Advanced Micro Devices) as well as an Xbox business executive from Microsoft, seem to be rather realistic, an actual take over would mark a dramatic shift in Apple’s strategy.

For years Apple profited from selling hardware that it developed as well as content created by the others. An acquisition of Electronic Arts would mean that Apple will have to start selling content developed by itself.

Considering that the vast majority of Electronic Arts’ games aimed at personal computers are developed for Microsoft Direct3D application programming interface not available on Apple’s platforms, the acquisition of the publisher may precede the creation of Apple’s own video game console.

Apple has been pretty aggressive in boosting its technology and, particularly, semiconductor talent at the company, something that is required to create its own video game system. A year ago the company acquired Power micro-architecture chips specialist PA Semi, then hired ex-IBM chip executive Mark Papermaster, then made an investment into graphics technologies developer Imagination Technologies.

Apple did not comment on the news-story.