It so appears that Electronic Arts might not be done just yet with its buying spree. On Monday, the video game company agreed to acquire smartphone game developer Glu Mobile for $2.4 billion in an all-cash deal. Glu Mobile developed the popular mobile game Kim Kardashian: Hollywood and Diner Dash: Adventures.
Following the takeover news, Glu Mobile’s share price surged as much as 34% on Tuesday, giving the San Francisco-based mobile game developer a $2.4 billion valuation. The deal is expected to close on June 30. The acquisition will boost Electronic Arts’ attempts to increase its presence in the lucrative free-to-play mobile gaming market.
“Mobile continues to grow as the biggest gaming platform in the world, and with the addition of Glu’s games and talent, we’re doubling the size of our mobile business,” Wilson commented.
EA CEO Executive Andrew Wilson said his company decided to buy Glu because he believes, “mobile is the fastest-growing platform on the planet.”
Glu Mobile is the second major acquisition by EA after it outbid Take-Two’s $1.2 billion offer to takeover UK-based Codemasters. Codemasters is behind popular racing titles, including Dirt, F1, Grid, OnRush, and the recent FIA World Rally Championship (WRC).
In addition to Kim Kardashian: Hollywood, Glu Mobile also developed other celebrities with the likes of Nicki Minaj, Britney Spears, Jason Statham, and Gordon Ramsay. Glu also worked for Taylor Swift’s social networking app, The Swift Life, which is unfortunately defunct.
“What we’ve seen through the pandemic is the incredible power and popularity of games, and it only continues to grow. Games have become an even more meaningful part of the lives of billions of people around the world, “Wilson said.
Glu mostly makes free-to-play games with microtransactions, which EA believes is a sustainable business model that it wants to keep pursuing. After all, EA earns billions from microtransactions. The merger allows Glu Mobile and its 800 employees to operate independently and develop games for EA and their own projects.
Wilson explained that despite Glu’s success in the smartphone gaming sphere, it lacks a “great international reach yet.” That’s where the company can utilize EA’s global presence and marketing prowess to grow its audiences for its titles.
Wilson was quite optimistic when asked whether the pandemic has any long term ramifications for mergers and acquisitions in the gaming industry.
“As we continue to invest in building out our portfolio of IP and growing our network of players, we will continue to look for opportunities — both with our own development teams and others that we think would be a great fit with us at Electronic Arts — to create and deliver more of the experiences that people want to play. Great teams and great games at scale are always going to be highly valuable,” Wilson commented.