Rumor: PopCap to be bought for $1 billion?

Perhaps the biggest game publisher in the casual game space, PopCap, is rumored to be in the middle of a buyout deal that could be worth over $1 billion. The source of this speculation is the TechCrunch web site which is reporting via unnamed but "multiple sources" that such an acquisition is in the works. However the article doesn't seem to know who the buyer might be, although it is apparently not Facebook-based game publisher Zynga. The article states that Zynga was interested in buying PopCap at one time but "the company couldn’t get comfortable with the price PopCap was asking for."

TechCrunch speculates that the buyer could be a big US publisher such as Electronic Arts or possibly an Asian-based game publisher. Officially Popcap has stated they do not comment on rumors and speculation. Earlier today a person named Jennifer Kye, who says she will start working at PopCap next week as a "Customer Engagement Lead", posted a note on her Twitter page that said the PopCap buyout rumors were false. However that post and a later related post have since been removed from her Twitter page.

PopCap is best known for its downloadable puzzle and casual games such as Peggle, Zuma, Bejeweled and most recently the hit crossover game Plants vs Zombies. TechCrunch has stated that the company's earnings are between $100 million to $150 million a year. Earlier this year PopCap executives were talking about launching a public stock offering for the company for as early as November 2011.

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23 Comments

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Sad news, leave Popcap alone to keep making the great games they have been producing. If someone must buy them out, please please please don't let it be EA.

I sure hope this doesn't happen, but if it does i hope the buyer is not Zynga. We don't need more games like ZumaVille or BejeweledVille.

xpclient said,
So sad there are so few free downloadable casual games. Most of them are flash-based non-downloadable.

It isn't that there are few casual games that are downloadable, it's just that most of them are shareware/fee, as opposed to free. Angry Birds is the lone exception - and it came to the PC *last*. (Even most casual games on smartphones are shareware/fee, as opposed to free. And by the by, most iOS games are also playable on any version of OS X later than 10.6.6.)

yowan said,
Microsoft?

Exactly, MS might be on a buying spree after bungie left them (I know 343 Industries have a few bungie employees, but still...) to try and get more exclusives on 360 and possibly 720 launch titles...

Although there's pretty much no track record to support it, I do believe it would make a lot of sense for Valve to buy them. Every time I read something about their strategy with Steam, they talk about how they've failed to deliver anything for the mobile gaming market and want to change that.

And they probably do have a billion dollars laying around.

PopCap, is rumored to be in the middle of a buyout deal that could be worth over $1 billion. The source of this speculation is the TechCrunch web site which is reporting via unnamed but "multiple sources".
However the article doesn't seem to know who the buyer might be.

Haha typical.

I think it is funny how these companies come to these evaluations. Pop Cap 1 Billion, Skype 8 Billion. The companies who buy these will not make that money back they would be better investing in other things with greater and faster returns. In this article it states Pop Caps revenue is around $100 to $150 Million a year. If we look at the conservative estimate of $100 Million once we discount the 30% they pay to many of their distribution channels for their wares it would take around 14.5 Years to get a return on a purchase of this company.

And that is if they can still keep making hit games which will cost money to produce and that does not include all their other overheads like employee pay.

Whoever buys this is an idiot.

Vice said,
I think it is funny how these companies come to these evaluations. Pop Cap 1 Billion, Skype 8 Billion. The companies who buy these will not make that money back they would be better investing in other things with greater and faster returns. In this article it states Pop Caps revenue is around $100 to $150 Million a year. If we look at the conservative estimate of $100 Million once we discount the 30% they pay to many of their distribution channels for their wares it would take around 14.5 Years to get a return on a purchase of this company.

And that is if they can still keep making hit games which will cost money to produce and that does not include all their other overheads like employee pay.

Whoever buys this is an idiot.


+1

Vice said,
I think it is funny how these companies come to these evaluations. Pop Cap 1 Billion, Skype 8 Billion. The companies who buy these will not make that money back they would be better investing in other things with greater and faster returns. In this article it states Pop Caps revenue is around $100 to $150 Million a year. If we look at the conservative estimate of $100 Million once we discount the 30% they pay to many of their distribution channels for their wares it would take around 14.5 Years to get a return on a purchase of this company.

And that is if they can still keep making hit games which will cost money to produce and that does not include all their other overheads like employee pay.

Whoever buys this is an idiot.


Very interesting point on seeing any kind of ROI on this. My first reaction was "there goes one of the biggest casual game makers out there".

Vice said,
In this article it states Pop Caps revenue is around $100 to $150 Million a year.

It is not specifically true.

Buyer pay :$1000m.
Then Buyer get : $1000m company + $100m every year.
Later, the buyer can decide to re-sell popcap to another party, if he manage to sell for $1000m then it is a $100m profit.

Popcap can be considered as a new asset, the trick is to know if the asset will increase their value or it will be devaluated in the time. Classically,is calculated under a 10-year-plan of return of investment.

Also is the synergy, Popcap feature several games that can push "x" platform.

If the business is profiting then, it is a good investment.

blahism said,
Hmmm.. 1 billion war chest for casual games.. Smells of EA

Well they need SOMETHING to populate their new crappy Origin store