EA buys out a game studio after shutting another one down 3 weeks ago
EA confirmed via a press release on Thursday that it had acquired the video game studio Respawn Entertainment. The studio, co-founded by former Infinity Ward chiefs and Call of Duty co-creators in the wake of their departure from Activision, has been bought out in a deal whose total value could reach $455 million.
The news by itself may seem odd, considering that EA shut down one of its other wholly owned studios, Visceral Games, only three weeks ago. A report from Kotaku sheds light on why EA made the move: as a response to another game publisher, Korea’s Nexon, making a formal bid to buy Respawn outright. Nexon currently publishes a mobile spinoff of Respawn’s Titanfall shooter series. Kotaku, citing sources close to the matter, claims that Nexon had bid over $400 million to buy the company outright. EA exercised its contractual right to match the offer, Kotaku says, and it ultimately outbid Nexon.
Among other things, the buyout preserves Respawn’s continued work on an upcoming EA game set in the Star Wars universe; EA currently enjoys an exclusive license to making Star Wars-related video games, and any takeover by another company would have to resolve whether or how such a project would continue in production. Respawn’s Star Wars project still does not have a title, a release date, or revealed gameplay footage. Respawn announced its work on an additional, unnamed VR game at Oculus Connect 4 last month; the EA statement says that project will continue apace, as well.
The deal may very well change the original EA-Respawn dynamic, which kicked off in 2010 as part of the “EA Partners” program. At the time, Respawn co-founder Jason West praised how the deal was structured, telling Games Industry at the time, “the EA Partners deal really seemed like it would allow us the freedom and independence to do whatever we wanted. They respect the culture we want to create, and we would own our own IP and control our own destiny and remain completely independent.” (West officially retired from Respawn in 2013 after unofficially disappearing from the company in 2012 due to “family issues;” Respawn co-founder Vince Zampella remains.)
Thursday’s deal does not break down exactly how that arrangement would change, but presumably, the acquisition includes rights to Respawn’s IP and other creations. “Respawn will join EA’s Worldwide Studios organization, a global creative collective of leading game development studios,” the press release says. Respawn’s total compensation includes $151 million in cash, up to $164 million in stock options, and up to $140 million based on “achievement of certain performance milestones, relating to the development of future titles.” (Kotaku claims this will be tied to, among other things, average review scores for Respawn’s games; Kotaku says the documentation stating this also refers to an unannounced “Titanfall 3” game.)
Author Sam Machkovech