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Electronic Arts Inc (NASDAQ: EA) surged almost 6.5% after USA Today reported that Amazon.com Inc (NASDAQ: AMZN) could announce an offer to acquire the game developer as soon as Friday.
Although the report was published by GLHF, a gaming and esports site and content partner of USA Today’s For the Win column, the news organization later added a note at the top of the original story saying that it “violated our editorial standards regarding the use of unnamed and unvetted sources,” and the language about a pending announcement had been removed.
Shares of EA, the publisher of hit games Apex Legends, FIFA and Madden titles, were up 6.5% to $135.85 in New York, valuing the Redwood City, California-based company at almost $38 billion.
It has been an exceptional year for deals in the video game industry, with Microsoft Corp’s (NASDAQ: MSFT) pending $69 billion purchase of Activision Blizzard Inc (NASDAQ: ATVI).
Although the sector boomed during the pandemic, sales have slowed this year. However, gaming companies are still seen as attractive sources of long-term revenue thanks to titles that can be monetized for years after launch.
Live-service games, which are continuously updated over time, and microtransactions made within games accounted for 71% of EA’s revenue last fiscal year.
With the consolidation in the gaming industry, EA has long been suspected of being a takeover target.
Moreover, even after hiring industry veterans and buying the video game streaming service Twitch, Amazon has yet failed to impact the gaming industry.
Picture Credit: Peterborough Examiner
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