EA Seals Pandemic, BioWare Acquisition

By Jonathan Stulce 2008-01-07 15:54:23 discussion comments
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Love them or hate them, Electronic Arts is the largest publisher in the video game industry. In their efforts to take over the world, many fans have seen their favorite developers get absorbed into the companies portfolio, and many will argue that quality has suffered. Yet others point out the very popular Madden and The Sims franchises. Today, EA sealed the deal and acquired Pandemic Studios and BioWare.

Actually, EA has acquired VG Holding Group, which included the aforementioned studios. I'm sure stockholders are peeing themselves right now with excitement, as both Pandemic and BioWare are successful studios that have AAA franchise titles most dedicated gamers enjoy. Both studios also represent genre's the EA library has been pretty weak in. Pandemic brings action/adventure fans to the fold with their popular Destroy All Humans franchise, which has been heralded by consumers and reviewers alike. Full Spectrum Warrior, Star Wars Battlefront I & II, and Mercenaries are other games of which Pandemic have developed in the past, with Battlefront being the only series owned by another company.

RPG fans are all too familiar with BioWare, and even those like me, who only tip toe in the RPG scene, have become wholly immersed in Star Wars: Knights of the Old Republic. They've also worked on other big name titles like Baldur's Gate and Neverwinter Nights, but that doesn't mean the company hasn't developed their own IP's. Currently, the big game that's getting much attention is Mass Effect, a quirky little title put together by the folks at BioWare.

Personally, EA sickens me. It might have something to do with their promise to focus on original games, and then labeling all their sequels as original titles. Maybe it's because the president of EA Casual said she doesn't care about her games being reviewed as crap because people buy them anyway. Whatever it is, stock holders are most likely picking out their new yachts, printing out schematics for their home bowling alley, or just having their vault designed after Scrooge McDuck's. Having all of these hit titles might raise the question, "How did EA obtain two very successful companies? Surely the studios were rolling in the big bucks without EA's help." I don't have the answer to that question, but I do have some information regarding the acquisition.

EA will issue equity awards without stockholder approval pursuant to NASDAQ Marketplace Rules 4350(i)(1)(A)(iii) and (iv). These equity awards, which EA had agreed to grant at the time it announced the acquisition of VG Holding Corp., will consist of promissory notes payable in shares and restricted stock units, or “RSUs,” with respect to an aggregate of approximately 2.8 million shares of EA’s common stock and will be granted as retention incentives to five employee founders of BioWare and Pandemic. Approximately 2.1 million of the 2.8 million shares underlying the promissory notes and RSUs will vest over time, provided that, among other things, the respective recipient continues to be an employee or service provider to EA (or one of its subsidiaries) through each applicable vesting date. Approximately 700,000 of the remaining RSUs vest based upon the achievement of enumerated performance objectives tied to the release of new products, provided that, among other things, the respective recipient continues to be an employee or service provider to EA (or one of its subsidiaries). EA also assumed outstanding VGH stock options to acquire, on an as-converted basis, approximately 1.2 million shares of EA stock, which are widely-held by employees of VG Holding Corp., BioWare and Pandemic.

Frank Gibeau, president of the EA Games Label, will oversee the studios within his organization. Ray Muzyka and Greg Zeschuk of BioWare Corp. have each been named as Vice Presidents of EA and Co-General Managers of BioWare Corp. Pandemic Studios’ Andrew Goldman and Josh Resnick have each been named Vice Presidents of EA and Co-General Managers of Pandemic Studios, while Greg Borrud has been named Vice President of EA and Chief Production Officer of Pandemic Studios.
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