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Interesting post on Slashdot

Discussion in 'UHall' started by Widow Maker, Aug 18, 2012.

  1. Widow Maker

    Widow Maker Slightly Crazed
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    "One of the world's largest gaming publishers and developers Electronic Arts has quietly put itself up for sale. While there have already been talks with private equity companies, the talks have not resulted in anything concrete. One of the sources is saying that EA would do the deal for $20 per share (currently at $14.02). Over the past year, EA's stock price has fallen 37 percent. Like other major game publishers, EA has been struggling against growing trend of social and mobile gaming."
     
  2. Uriah Heep

    Uriah Heep Crazed Zealot
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    Interesting indeed.
     
  3. NuSair

    NuSair Babbling Loonie
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    EA has been struggling because they are idiots when it comes to producing games with a name other than Madden.
     
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  4. Pinco

    Pinco UOEC Modder
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    The problem of EA is that they just want the money and don't care about the quality... there are many titles that would be great if they just put a little more efforts :/
     
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  5. Orgional Farimir

    Orgional Farimir Lore Keeper
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    The problem with EA is they are too big. They are the Citi of video games. What EA needs to do is sell off their "smaller" parts and focus on their departments where they can increase their revune. Maybe they could sell Pogo to FB. That could be interesting.
     
  6. Ender76

    Ender76 Journeyman
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    To be fair, all the video game companies are struggling, it's not just EA. The decline in desktop computing / increased mobile usage is a pretty stiff headwind
     
  7. Vlaude

    Vlaude Lore Keeper
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    I've been seeing these rumors as well. Very interesting... *strokes nonexistant beard*
     
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  8. Lady Storm

    Lady Storm Crazed Zealot
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    This doesnt shock me, not after the COO of EA was on the Stocks report on CNN. Thier look to buy back stock is prime indacator that one of a small handfull of things were up in the air. One being their thinking of offering the company for sale. With a buy back of stock of under 15$ per share and if they do find a buyer @20per your looking at a 5$ per share profet. Not to mention the initial deals many would make to join that board... if it is to go for further corprate running as usual. But and here is the big rub not too many of you are awaire of ... If and I do mean if EA sells out to a "Bain " type company....... Lets put it this way... I do hope Jeff and company do have good copys of their resume's handy.
    UO might be tiny compaired to other assets of EA and just tossed in the market to whome ever can take us off their hands.. or worse case cenerio we get shut down with Mythic.

    Now as the OP says this is not what IS but what could be up at EA hq. We could get very lucky and have Blizzard buy us... but that is only wishing for the best.....
     
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  9. Lady Mal

    Lady Mal Journeyman
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    Does anyone know if Garriot has enough cash for it? Now that would be interesting....
     
    #9 Lady Mal, Aug 19, 2012
    Last edited: Aug 19, 2012
  10. O'Brien

    O'Brien Thought Police

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    I think if he did, he would be doing more than throwing his name around and building up F2P facebook flash games.
     
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  11. Lady Mal

    Lady Mal Journeyman
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    Ahh well. Back to hoping someone who cares will buy it.
     
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  12. Lady Storm

    Lady Storm Crazed Zealot
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    Even though he sold his Austin home for a nice amount, It still wouldnt be enough.... I think EA wouldnt sell it back to him if Pigs flew and Dragons sat on the Board room table.
    They are not exactly friends.
     
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  13. Woodsman

    Woodsman Guest

    EA bought Pogo to specifically deal with some of their financial issues, namely getting into the browser/free market.
    Blizzard's parent company is trying to sell its majority share of Blizzard. If Blizzard can't even buy themselves back, I doubt they could buy EA. And if nobody will buy the majority share in Blizzard, I doubt they would in EA.
    He tried working something out with EA over Ultima, they wouldn't do it. He just received over $25 million in a settlement, so he's got money, or could get the backing he needed.
    He has another Austin house worth quite a bit, but as I said he received a big settlement from NCSoft recently, and even if he doesn't have it yet, he knows enough people to get whatever he needs. You are right though, EA would not sell to him because of the past.

    Plus, if they sold to him and he did something with the Ultima IP that made a lot of money, EA's leadership would look really foolish. It's much safer and maybe more profitable for EA just to license properties out.

    I think personally EA is just trying to get a bump in their stock prices by getting people to say they are worth a lot.
     
    #13 Woodsman, Aug 19, 2012
    Last edited by a moderator: Aug 19, 2012
  14. Lady Storm

    Lady Storm Crazed Zealot
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    Well dont look now I was just told by the EA customer service there is no longer any phone service for UO it is now by Mythic and you must do so from the help button on the web page.... no live help from EA Customer Support at all.
     
  15. Tina Small

    Tina Small Stratics Legend
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    Were you calling from inside the US, or from Canada?
     
  16. Lady Storm

    Lady Storm Crazed Zealot
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    USA Had to go into Origin's main web to have them call me .... they are fixing the trouble... i hope
     
  17. Lady Storm

    Lady Storm Crazed Zealot
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    I do wish they would allow you to buy multiples of items in one purchase... this one at a time is for the birds.
     
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  18. Uriah Heep

    Uriah Heep Crazed Zealot
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    But then they might make more money, and put themselves in a higher tax bracket! :dunce:
    Cause every CC transaction is costing them a % in fees, nothing is free, not even for EA.
     
    #18 Uriah Heep, Aug 19, 2012
    Last edited: Aug 19, 2012
  19. blinkdog

    blinkdog Adventurer

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    Richard Garriot has millions.
    Even a struggling EA is worth billions.
     
  20. Tanivar

    Tanivar Crazed Zealot
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    If a 'Bain' type company buys EA they may well sell it off in pieces and they wouldn't have the problem with Garriot that EA now has.

    Hopefully someone who wants to draw in customers and make money buys UO and does things to the game that draws in paying customers instead of encouraging them to ***** until they leave in disgust. Given what has been done to UO the last 10 years, there's a damn lot more room for improvement than their is for things to get worse, shy of the game shutting down. Hopefully potential buyers will see that.

    Time will tell.
     
  21. Woodsman

    Woodsman Guest

    That's not surprising, they treat the Mythic MMORPGs all the same, and we share community people with the other Mythic MMORPGs as well as GMs.

    What's surprising is that UO doesn't even have an associate producer.
     
    #21 Woodsman, Aug 19, 2012
    Last edited by a moderator: Aug 19, 2012
  22. SlobberKnocker

    SlobberKnocker Slightly Crazed

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    i often wonder what the valuation is for the ultima title. does anyone remember what it was initially sold for?
     
  23. Woodsman

    Woodsman Guest

    Hard to say since it wasn't just Ultima but every other game that Origin was producing at the time Garriott sold them to EA back in 1992.

    This article covers some of the reasons, but doesn't mention how much Garriott made The Escapist : The Conquest of Origin
     
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  24. Uriah Heep

    Uriah Heep Crazed Zealot
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    I sure wish those floppies had been cheaper...gaming would be so much different.
     
  25. Uriah Heep

    Uriah Heep Crazed Zealot
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    And after reading the article it made me sad, that we got overpowered and absorbed by the beast. But life goes on for all of us. And totally off topic, but I ran across Sunsword's linked in the other day, would you believe he actually lists Age of Shadows as an accomplishment?!?!
    I'm still laughing at the nerve that had to take, to even mention being associated with it.
     
  26. Lady Storm

    Lady Storm Crazed Zealot
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    Woodman if I remember correctly the parent company of Blizzard is a book company. The owners might be looking at liquifying assets to retire and set the company up for future investors. Now mind you the info is older then a year, The interview I watched on TV might be out of date and out of context today. As for Blizzard the company itself, with the wow still inthe 9 million active accounts, Starcraft, Diablo3, and a few other very popular games running at full tilt... they are at no loss for cash.
    EA has always run things at their own style. This has been the Buy, divide, conquor, and liquidate, followed by the absorb the good and toss the rest. Didnt matter if the tossed out items were gold in the hands of the creator or not. If it had to do with the previous owners it was sacked period. Bio has remained hands free for the moment... but if I was the guys at Bio I'd be looking at every move EA makes with a fine tooth comb and a magnifing glass on every note they send. Dont trust EA as far as I can toss the Madden Football cartridge.
     
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  27. Nexus

    Nexus Site Support
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    Not exactly a book company, they are into music, television, film, publishing, telecommunications, the Internet, along with video games. One of the other companies they own you might have heard of include Universal Music Group. These guys are like the Disney of Europe....
     
  28. swroberts

    swroberts Journeyman
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    Well none of this is good for us. With Star Wars failing and the UO population around 100,000 (with WOW in the millions) and the significant competition with social media. It would not be a stretch for a new company to buy EA, axe Star Wars, have a big ....15 years was a great run and retire UO. And put all the current online resources into a diffferent company direction. Let's face it, UO is profitable, but if they can lose 100,000 customers for a potential million or 2, we are gone.
     
  29. MalagAste

    MalagAste Belaern d'Zhaunil
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    To say UO is in competition with WoW is like saying that a mosquito competes with Water Buffalo at a water hole.

    UO is NOTHING to WoW. A gnat of a nuisance perhaps but not in any direct competition for players. I'm willing to bet that 75% of WoW players don't even know UO exists... nor would they care. They are in the candy game. Most play for the eye candy not the content. They play because their friends do and they are lead around by a series of quests. They wouldn't know true gameplay and sandbox play if it bit them... and very few could even find their way to finishing a character skill set in UO.... there is nothing to lead them around and thru it.

    UO will never have the following of games like WoW. We don't have the eye candy to keep them occupied and we don't have the quests to lead them around the game by the nose. Most folk who play games like that don't want to use their imaginations to play, they aren't into the community feel like UO has they are just playing to conquer.

    Lets face reality and remember we can't compete with WoW we are insignificant in comparison... now it's not that I think WoW is superior to UO in any way because I don't.... I know UO is superior in most ways save graphics... But I do know that thinking that we are in the same circle as them is ludicrous. I think graphics wise we have slipped so far we are now in a class by ourselves. Maybe we would only appeal to the nostalgia set. That's more likely.
     
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  30. Tanivar

    Tanivar Crazed Zealot
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    It's also possible a new owner may have a few people check out each game, see that EA's decision makers, while perhaps competent to run a business, have no clue how to make entertaining computer games, and just replace the management personnel in control of the various games with people who can tell the difference between grind play and fun play. Then hire a few programmers in their late twenties and early thirties who know the languages the older games are writen in and can write reasonably bug-free code in those languages. With that, the two major problems with UO, and likely the other EA games, are gone. Blizzard's people show it can be done with competent leadership and staff, so it can be done with EA games as well.
     
  31. Theo_GL

    Theo_GL Grand Poobah
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    I hope you mean could Richard buy back Ultima from EA and not Electronic Arts. EA's current market cap is $4.2 Billion dollars. It would take probably at least 10% premium or close to $5B to buy the company. ActivisionBlizzard is a $13B company and might be able to stomach the acquisition but it might also run into govt issues in a merger of the two biggest gaming companies.

    Now it would be interesting for a media company like Comcast (90B) or Time Warner (40B) to pick EA up and try to fold them in to diversify revenues. However, again - not many people like to buy a declining business unless there is a gem you can harvest and sell off the rest.

    You buy smaller companies with a growth story - not a larger company with a decline story.
     
  32. Eaerendil

    Eaerendil Professional Mall Santa and Legendary Piglet
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    WE should buy it. Anybody in? I give 100 $ :D
     
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  33. Theo_GL

    Theo_GL Grand Poobah
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    This is fairly funny. Who is making $5/share?? Do you think the CEO gets all the 'buyback shares'? LOL

    A stock buyback is when you take your cash and buy your companies shares on the open market. When bought - they are retired and removed from the float. There is no 'profit' since the shares no longer exist.

    Companies do this to boost earnings per share (less float makes same amount of earnings higher) and to combat the devaluation of employee share programs. When you have cash on hand and your stock is devalued you buy back your shares.

    It actually counters acquisition plans as a company is a bigger acquisition target with a cash hoard vs less outstanding shares. Buying stock back does not make a company more valuable.

    Lets take a company with 1 mil outstanding shares at $10 share (10mil cap) and 2mil in the bank with a P/E of 10 ($1m profit a year). Thats $2/share cash and EPS of $1. If they spend that $2m buying back shares - they go from a company with 1m outstanding shares to 800k and $0 in the bank. The EPS becomes $1.25 and keeping with the P/E multiple - the stock would be at $12.50. However, the 'value' of the company is still $12.50 x 800k or 10 mil market cap with $0/share in cash. The difference is lower float and no cash in the bank. You'd rather acquire the company before the buyback and not after. The buyback is not helping them get acquired.

    Companies buy back shares when they feel the market is undervaluing their shares and they don't have a better place to put their capital for expansion projects.

    EA's P/E ratio is 72. that is insanely bad unless they are growing like mad. This stock has pretty far to fall yet unless they can somehow increase profits. Buy some put options at $10 in 2013. This stock could fall to $5 easily for an approx 25 P/E which would be more appropriate. P/E of ActivisionBlizzard is 16. Put your money there instead.
     
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  34. Nexus

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    That's why they (Activision Blizzard) are for sale too right?

    The entire industry is suffering at the moment, it's not just an EA thing. A major market shift is going on and most of the long existing companies are getting caught in the grind.
     
    #34 Nexus, Aug 21, 2012
    Last edited: Aug 21, 2012
  35. swroberts

    swroberts Journeyman
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    The point was not that UO was anyway competition with WOW, just that a new company might ask why waste resources on a game like UO when those resources could be better suited to make a game that competes with WOW. It all depends on who buys EA and what that company's direction will take. I believe UO's future is not certain.
     
  36. Lady Storm

    Lady Storm Crazed Zealot
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    We can thank the smart phone and tablet users for the change but this was in the offering the minute they made the games friendly to those users.
    EA if purchased I think the buyer would liquidate it down to smaller chunks and ether sell off or dismantle the lesser valued parts. Ether way where does that leave us?
     
  37. Woodsman

    Woodsman Guest

    ActivisionBlizzard is itself up for sale. They aren't going to buy a $4 billion company anytime soon. Plus it would be far more profitable for Activision to take properties they have lying around and put them into development than buying up EA and figuring out what to do with it.
    Both of those companies have been burned by huge purchases related to entertainment and online services in recent years. Comcast maybe regretting their NBC purchase, since they are chopping up the most profitable shows. Time Warner...they do own Warner Brothers which owns Warner Brothers Interactive, which has put out a lot of games in recent years, and which owns Turbine, which owns LOTRO/DDO/Asheron's Call. However, they are suffering from the same problems that EA and Activision are suffering.

    Plus if Time Warner wanted to get really big in the gaming industry, they already have the IP with all of their movies, TV shows, DC Comics, and numerous past acquisitions, they just need to go out and start buying up smaller studios or just hiring people. It would be more profitable for them to spend $2 billion on building up Warner Brothers Interactive than spending $4 billion or more on EA. As a matter of fact, within Time Warner, there are dozens of former videogames from years past that they could reboot if they wanted to, in addition to all of the IP they actively develop.
    Exactly. Some people have tossed around Apple (since they have like $80 billion cash), but Apple is still at its heart a hardware company, and they've even tried to get out of some software areas that they are currently in, and they are trying to reduce the amount of Windows software they offer. Apple has tons of developers flocking to Macs anyways - even EA is offering Origin for Mac OS X. They don't need to spend billions on something that's already happening.

    Another one was ZeniMax. ZeniMax is like Time Warner and Activision. They have so much IP that is not being actively developed. It'd be cheaper for them to boost their current companies/divisions and reboot some of their older IP than to spend billions buying and then integrating EA.

    Ultimately, any videogame/entertainment company big enough to buy EA probably has dozens, if not 100+ former major titles just lying around unused that they could draw from. Browse through GOG.com. That's just the tip of the iceberg on gaming IP that is no longer in development.
     
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  38. Woodsman

    Woodsman Guest

    UO is probably making millions in profit, so not a waste of resources, especially given how profitable it is versus the amount of resources allocated to it. EA still thinks the franchise can make money, obviously they wouldn't have put millions into Ultima Forever.
    UO's future is not certain based on how silent the team is on the future and direction of the game. It's been a year since somebody truly had a vision for UO's future. Jeff Skalski and Mesanna and a few others have tossed out bits and pieces here and there over the past 10 or 12 months but none of it adds up to an actual vision for UO.
     
  39. Woodsman

    Woodsman Guest

    I remember back in the 1990s when the "analysts" were claiming that consoles were going to kill off desktop gaming. It happened with the PS2, it happened with the Xbox 360, Wii, and PS3, and now some are claiming that mobile devices will kill it off.
    EA's biggest asset is it's IP and it's customer base. If another videogame or entertainment company bought EA, it would be with the intention of retaining that customer base and IP, because that's what a videogame/entertainment company would be after.

    If it's bought by financial company, that's another story, but a financial company would find ActivisionBlizzard much more attractive, and most financial companies would not want to dabble in an industry that is going through a lot of problems right now.
     
  40. swroberts

    swroberts Journeyman
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    Millions in profit might be a stretch, but if you think a company wouldn't shut down a project that makes millions(with very low growth potential), moving it's personnel and resources to a project that will make millions (with medium to high growth potential), you are fooling yourself. EA doesn't believe that UO has a significant future, as noted by their WOW killer Star Wars and they had to limit UO support to make that happen. If EA though killing UO would make Star Wars successful and raise their stck a few points, we would be gone. UO is not the big stick it once was and it will probably never be sold individually because of franchise problems.

    I would put money on that Mesanna was given the marching orders of "We are selling the company, get through the 15th year anniversary and then put nothing in development until we know what we are going to go forward with." So what we are seeing is a positive spin on this with the promise of Bug fixes.
     
  41. Woodsman

    Woodsman Guest

    I would put money on that she wasn't, because first you have to find a buyer, and there are no reasonable buyers in this economic climate. I'm repeating myself, but if Vivendi can't find a buyer for ActivisionBlizzard, I doubt EA is going to be snapped up by anybody.
     
  42. swroberts

    swroberts Journeyman
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    My friend, I completely agree.
     
  43. NBG

    NBG Lore Master
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    hmmm they could sell UO US rights to China game company? is that possible?

    Brings out the NetDragon dead horse.....:bdh:
     
    #43 NBG, Aug 21, 2012
    Last edited: Aug 21, 2012
  44. Woodsman

    Woodsman Guest

    As an iPhone owner, I agree, because that seems to be where NetDragon is headed. But UO on an iPhone would not be a pleasant experience.
     
  45. NBG

    NBG Lore Master
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    Well, Have you seen the new 10 inch tablet phone?

    UO on one of those would be big! Have to have custom control software but I do not see why not....