Electronic Arts buys Playfish for $400 million

Leading US entertainment software company Electronic Arts Inc (EA) has acquired UK's developer of social network games Playfish Ltd yesterday in a deal valued around $400 million, aiming to step up its position in the lucrative online social entertainment sector and strengthen its focus on the transition to digital and social gaming.

Under the terms of the deal, EA will pay Playfish approximately $275 million in cash and $25 million in equity retention arrangements. Additionally, Playfish is entitled to a cash consideration of up to $100 million subject to certain performance milestones through the end of 2011.

London-based Playfish Ltd is a creator of free to play social games that can be played on social networking sites such as Facebook, MySpace, Bebo and iPhone. The company has development centers in China, US and Norway and has more than 150 million games installed and played worldwide.

The game developer has over 60 million monthly active players across its ten titles including Pet Society, Restaurant City, Who Has The Biggest Brain and Country Story.

Playfish is supported by Venture capital firms Accel Partners and Index Ventures and private equity firm Stanhope Capital.

Redwood City, California-based Electronic Arts is a leading global entertainment software company which develops and distributes interactive software for video games, personal computers, wireless devices and the Internet. Latest block busters with over five million copies each sold include FIFA 09, Madden NFL 09 and Need for Speed Undercover. The company reported revenue of $4.2 billion for the year ended in March 2009.