Apple looking to acquare Electronic Arts?

[Bateluer]

Not sure if this would be positive for the industry or not. I didn't know that Apple was large enough to outright purchase Electronic Arts. Either way, if Apple wants to make inroads into that theater, they'd better start allowing more graphics card options in their systems, more powerful options in their systems, and user upgradeable parts. Also, they'll need to subtantially slash their prices. The only system I see as 'user upgradeable' is the Mac Pro, and a similarly configed PC costs 1/3 as much.

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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.

 

[Zenoth]

Apple making their own video game console... I could imagine that, I guess. It'd be a way for them to compete against Microsoft (more than against Sony and Nintendo anyway) where they can't with personal computers, namely games (generally speaking, that is, I still don't know of any person only owning an Apple computer claiming to be a PC gamer, you got the point).

But acquiring Electronic Arts... I don't know, if that is a necessary step to attain what is needed to make their place within the video gaming market (with their own console) then alright, let them do it, I just hope that the quality of their [Apple] console won't reflect on the quality of the software that the company they want to acquired has developed over the past couple of years, but for that we can only hope.

 

[Red Irish]

Would this entail focus on apple's console to the detriment of our beloved platform?

(assuming that you feel that the weaker presence of EA in pc gaming is something negative)

 

[Maximilian]

Maybe apple will take over EA and dictate all of its operations changing the way the company operates at every level forcefully, like what EA did to many developers. Except this time apple will likely have a positive influence on EA.

 

[Newbian]

Why would anyone want a underpowered console that costs three times as much as the others?

 

[Schadenfroh]

Maybe Apple is going to buy up several major publishers and developers and then launch their own console. Microsoft would have done well buying up major publishers / developers before trying to enter the hardware market (personally, I would not have entered the hardware market at all). It is not like Apple to develop software for hardware that they do not own. Heck, last I heard they were even trying to build their own chips for iphones / ipods.

 

[rivan]

Originally posted by: Newbian
Why would anyone want a underpowered console that costs three times as much as the others?

But it'll be SHINY!

For Apple to really secure itself, it needs to continue to diversify. The iPod started that diversification, the iPhone continued it.

This is just another market for Apple to enter.

 

[Bateluer]

Originally posted by: rivan

Originally posted by: Newbian
Why would anyone want a underpowered console that costs three times as much as the others?

But it'll be SHINY!

For Apple to really secure itself, it needs to continue to diversify. The iPod started that diversification, the iPhone continued it.

This is just another market for Apple to enter.

I don't see Apple being very successful in the console market. They've already proven that they don't create competitively priced products and overcharge for that they make. Nintendo has proven the sweet spot for a console is 200-250 dollars. The Sony PS3 is languishing because of its high price. An Apple console would cost more than the 160GB PS3 while boasting the processing power of the Wii. It would, however, be a much prettier device than its competitors.

 

[SunnyD]

Originally posted by: Bateluer

Originally posted by: rivan

Originally posted by: Newbian
Why would anyone want a underpowered console that costs three times as much as the others?

But it'll be SHINY!

For Apple to really secure itself, it needs to continue to diversify. The iPod started that diversification, the iPhone continued it.

This is just another market for Apple to enter.

I don't see Apple being very successful in the console market. They've already proven that they don't create competitively priced products and overcharge for that they make. Nintendo has proven the sweet spot for a console is 200-250 dollars. The Sony PS3 is languishing because of its high price. An Apple console would cost more than the 160GB PS3 while boasting the processing power of the Wii. It would, however, be a much prettier device than its competitors.

Um... Nintendo already owns the "small white plastic box" console market. Slapping an apple logo on a Wii does not a better console make.

 

[ViviTheMage]

I do not know how I feel about this :/

bad I think.

 

[nitromullet]

I'm surprised the article didn't mention digital distribution. The first thing that comes to my mind when I hear "Apple rumored to buy EA" is "iGames". Apple showed that it was possible to make money selling music in a post-Napster world, I imagine they plan on doing the same thing with games.

 

[Wreckem]

Originally posted by: Schadenfroh
Maybe Apple is going to buy up several major publishers and developers and then launch their own console. Microsoft would have done well buying up major publishers / developers before trying to enter the hardware market (personally, I would not have entered the hardware market at all). It is not like Apple to develop software for hardware that they do not own. Heck, last I heard they were even trying to build their own chips for iphones / ipods.

MS would have ran into various anti-trust issues and the purchases probably wouldnt have been allowed by the FTC.

I doubt Apple buys EA its not like they'd stop producing for the Xbox or PS3. Mutliplatform is key for the publishers.

 

[Wreckem]

Originally posted by: nitromullet
I'm surprised the article didn't mention digital distribution. The first thing that comes to my mind when I hear "Apple rumored to buy EA" is "iGames". Apple showed that it was possible to make money selling music in a post-Napster world, I imagine they plan on doing the same thing with games.

The economics of producing games and selling them is a lot different that selling someone elses wares.

They sell songs and give a portion of the money to the producing company. In video games, there are often $10million+ budgets.

Online distribution and episodic content is the future of video games, but they've(all the publishers) have already been working on that for quite some time. And right now, the game industry is making money hand over fist.

 

[pontifex]

Originally posted by: Maximilian
Maybe apple will take over EA and dictate all of its operations changing the way the company operates at every level forcefully, like what EA did to many developers. Except this time apple will likely have a positive influence on EA.

Are we talking about the same Apple? you mean the company that puts out over-priced garbage?

 

[Golgatha]

Originally posted by: Newbian
Why would anyone want a handheld, underpowered console that costs three times as much as the others?

There fixed, and it's called an iPhone.

 

[Golgatha]

Originally posted by: pontifex

Originally posted by: Maximilian
Maybe apple will take over EA and dictate all of its operations changing the way the company operates at every level forcefully, like what EA did to many developers. Except this time apple will likely have a positive influence on EA.

Are we talking about the same Apple? you mean the company that puts out over-priced garbage?

Over-priced yes. But it's typically not garbage.

 

[pontifex]

Originally posted by: Golgatha

Originally posted by: pontifex

Originally posted by: Maximilian
Maybe apple will take over EA and dictate all of its operations changing the way the company operates at every level forcefully, like what EA did to many developers. Except this time apple will likely have a positive influence on EA.

Are we talking about the same Apple? you mean the company that puts out over-priced garbage?

Over-priced yes. But it's typically not garbage.

i guess that's debateable

 

[s44]

Ugh! The Bioware situation there is precarious enough as it is, and seems heavily dependent on Riccitello's personal influence. Now a bunch of execs who know nothing about gaming and are experts at inflating the price for making stuff shiny might take over?

 

[Lonyo]

I don't see how it would benefit Apple.
EA would have to continue making games for the Xbox and for Windows, as well as the PSP and DS, and EA already ports most of their big titles to OSX anyway (Sims etc).

As far as digital distribution, if you are going to buy someone, you wouldn't buy EA, you would buy Valve who already have a foothold in the DD market as a major player, rather than someone like EA who (arguably) people aren't always too keen on buying from, especially through their DD store.
An EA under Apple would have to offer lots of products for Apple competitors in any market (consoles, handhelds, personal computers) to stay afloat (they are currently losing money I think as it is), so it doesn'tmake sense in many ways from a business perspective. There are many other developers (smaller ones ideally) who would be better suited for takeover.

On the other hand, EA has a market cap of $6.5bn and Apple has more than enough cash on hand to buy them outright if they really want, although a strategic acquisition of significant shareholding in EA which would allow them to encourage more Apple games might be an opportunity.

 

[Maximilian]

Originally posted by: pontifex

Originally posted by: Golgatha

Originally posted by: pontifex

Originally posted by: Maximilian
Maybe apple will take over EA and dictate all of its operations changing the way the company operates at every level forcefully, like what EA did to many developers. Except this time apple will likely have a positive influence on EA.

Are we talking about the same Apple? you mean the company that puts out over-priced garbage?

Over-priced yes. But it's typically not garbage.

i guess that's debateable

Most things they make are good stuff, i wouldnt buy a computer from apple but their ipods and iphones are solid pieces of equiptment, mainly the ipod as the iphone is pretty expensive.

 

[mindcycle]

Unlikely that Apple will buy EA

All of the movement to Apple has fueled the speculation that Apple might be strengthening its position in the video game arena with the addition of a variety of new talent from both AMD/ATI and Microsoft. We have been bombarded with whispers that Apple is considering making an offer to buy Electronic Arts.

While some of these rumors might have a shred of truth in them, we have to weigh in our opinion by saying that if Apple is really considering such a move, it would likely be one of the biggest missteps in the company?s history and we consider it highly unlikely.

As some have pointed out, what would be a better value is for the company to somehow acquire Warner Bros. Music because that way they would control the rights to 20 percent of all of the recorded music. This would be a much better value and offer the ability to yield immediate dividends by virtue of the fact that it would be a natural fit to plug this into iTunes and expand the way in which they can control the price as well as the way in which the music is delivered.

Much of this speculation also goes with the possibility that Apple is working on a larger device that is targeted at social networking as well as gaming. This is the reason that Apple has been acquiring all of the new talent. Some believe that this 10-inch screened device might be the ideal size to introduce a next generation portable gaming platform that would set it apart from anything else on the market today. We speculate that this is, in fact, possible, but without at least some netbook and tablet computing features, we think that the possibility of a device this size being successful based solely on a social networking and gaming business model could be trick for a company that has never really previously played successfully in this field.

http://www.fudzilla.com/index....view&id=13517&Itemid=1


Plus this..

Adami noted that there is chatter that Apple (AAPL Quote) is eyeing Electronic Arts(ERTS Quote) as a takeover target.

"Adami" is the notorious Fast Money man Guy Adami, whose reputation on predictions is...sketchy, at best. Though we have to note, this isn't a prediction, it's just "chatter".

http://kotaku.com/5240074/appl...ectronic-arts-takeover

 

[Modelworks]

Well the biggest thing hurting Apple in the computing world besides the price is lack of software. Gaming on Mac has never been fun, always limited to games that were ported poorly or not at all. If they make Mac a viable gaming platform they could get quite a few converts. Apple has a preset hardware they sell. Developers know what that hardware is and what drivers they will use. Perfect for a developer who already prefers consoles because of the hardware standardization. Compare the patches that are released for pc games vs those for Mac. It is a much easier platform to develop for .

Before they couldn't get publishers to spend money on Mac titles. If you own the publisher you don't have to worry about that .

 

[ivan2]

it sure will makes it easier and more efficient for the haters.

 

[sactoking]

What's the PCs biggest software advantage over the Mac? Games.
EA is the second-largest publisher of games.
Apple buys EA.
Apple SHUTS DOWN EA.
Significantly fewer games on the PC.
Less incentive to buy PCs.
People Buy more Macs.
Apple wins!

 

[BladeVenom]

If they plan on making a console, this is a good idea. Buying EA means they could force fans of the Sims and sports to buy their console, or do without those very popular titles. If the next NFL game was only available on an Apple console which console do you think football fans will buy?