Thursday, June 23, 2011

Riffing on the Popcap acquisition rumor

Yesterday Techcrunch broke this story:

Popcap to be acquired for $1+B, which started a rumor mill going. Who could it be? Story points to potential buyers as: Zynga (discounts them as not having stomach for the price & multiple, EA, DeNA, Tencent.

I tweeted about it saying I thought EA just as a gut call. Later though, I started wondering why no one had asked if it could be Google, or even more credibly, Microsoft.

Techcrunch added a story about rumors that it was likely EA.

And then today, VentureBeat had this story pointing to EA (nothing new, just citing the techcrunch article), but being skeptical about it and pointing at other potential buyers: Zynga, DeNA, Media companies like Fox, Activision/Blizzard, and throwing water on any "stingy" chinese companies.

(WTF, why is VentureBeat also not mentioning Microsoft? Does everyone assume they are broke after buying Skype?)

The interesting thing about these pieces is that they are looking at the market rather naively. Techcrunch refers to Popcap as a startup while at the same time mentioning that they've been in business since 2000. VentureBeat mentions their social games but barely mentions mobile let alone all the other platforms they are on.

Anyhow, I believe the EA rumor is most likely accurate (though I still have a side bet on a surprise that it's Microsoft, but I'm crazy like that).

Just for grins and giggles though, here's some alternate takes on the headlines made possible by this acquisition, which I think make it more apparent that this isn't such a bad buy. Allow me my editorial liberties:

If it's EA:
  • #1 iPhone games publisher buys #2(3?) iPhone games publisher to further cement leadership
  • #2 Facebook games publisher buys #3 facebook game publisher in bid to take lead position away from #1 FB games publisher
  • Leading western games publisher buys another entry ticket in race for China gaming market (Popcap has social games/portal play in China, a shanghai studio doing original IP, etc)
  • EA buys leading casual games dev, "Popcap is the Valve of casual games" says Someone.
If it were to be Microsoft
  • MS buys publisher of popular iPhone, iPad games in bid to secure exclusive content/features for MS phones/tablets
  • MS buys publisher of social games in bid to catch up in that race
  • See same two above points about traction in Asia and Popcap's production abilities, quality
In any case, my point is that there's a lot more value to Popcap than just "Plants vs Zombies on Facebook or iPad". They are a force in the mainstream games market with recognizable IP, real revenue, good distribution, top notch development talent, international portfolio of games and distribution, etc. You can play their games on almost every platform under the sun - even play bejewelled on airplane headrests!)

$1B is a lot of money, but Popcap is an awesome crew, and likely worth it. I sure hope whoever it is doesn't screw the magic formula.

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