Electronic Arts has agreed to acquire Australian iOS and mobile games developer Firemint, the studio behind the popular Flight Control and Real Racing titles. In its Q1 2011 (fiscal Q4 2011) earnings call, EA reported that it paid less than $25m for Firemint. The price was lower than the $29m it paid to acquire iOS games publisher Chillingo in late 2010. The acquisition is consistent with EA's new strategy of focusing on relatively small scale acquisitions of companies that are solely focused on digital (including mobile) games.
EA has also acquired cross platform mobile games development and porting specialist Mobile Post Production. EA will use this acquisition to help it expand on to new mobile platforms and devices.
Following the deals, EA reported record revenues from its EA Mobile division. Mobile games revenues for Q1 2011 reached $70m (27 per cent higher than the $55m it achieved in Q1 2010 and 19 per cent higher than its Q4 2010 revenues of $59m).
EA's Q4 2010 acquisition of iOS games publisher Chillingo has helped it cement its position at the top of the Western mobile games market, as its record $70m Q1 revenues will attest. Whereas the acquisition of Chillingo provides EA with a wide iOS games distribution and publishing network, the Firemint deal is about securing development talent and original intellectual property (IP).
EA Mobile's position at the top of the Western market has historically been based on its combination of popular games based on IP and licences held by its videogames parent company and its wide distribution network from deals with network operators. As the network operator distributed mobile games market declines and established games brands face competition in increasingly crowded application stores, it makes sense for EA to develop publishing relationships with the new independent developers and acquire talent and IP where it can.
With further acquisitions possible, IHS Screen Digest expects the addition of Firemint's titles and team to help EA Mobile maintain its strong performance throughout 2011.
Mobile games M&A activity in 2011 is continuing the rapid growth trend that emerged in 2010. In total, IHS Screen Digest counted 25 mobile games related acquisition deals in 2010 with a total disclosed value of more than $1.3bn (up from 12 deals in 2009). 2011 will likely set new records with nine acquisitions deals reported in Q1 alone.
IHS Screen Digest will provide further analysis of mobile M&A and funding activity and the mobile games industry in its forthcoming Mobile Funding and M&A and Mobile Games Market Monitor reports, to be published shortly.
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