PopCap Games must be pretty confident in its ability to post strong financial results over the next couple years. Either that or the company likes Electronic Arts for more than just its money.

A new report by Forbes, citing anonymous sources, says PopCap turned down a $1 billion cash acquisition bid from social gaming darling Zynga — maker of FarmVille and other hit games — in favor of the offer it accepted from from EA earlier this week.

The EA deal offers less up front — $650 million in cash and $100 million in stock — but more over time (up to $1.3 billion total) if PopCap can hit some ambitious earnings targets between now and 2013.

PopCap executives this week acknowledged that there were other bidders for the company but declined to go into specifics.

“There was a competitive process,” said PopCap co-founder John Vechey in an interview with GeekWire. “We explored a handful of options, and ultimately chose EA.”

He cited factors including EA’s strong cultural fit with PopCap, as reflected by its focus on making great games, and the ability to tap into the game giant’s publishing infrastructure.

Comments

  • Guest

    This news is a win-win for both companies involved. PopCap gets the financial backing of the world’s largest entertainment company and Zynga gets to keep building its platform on its own terms. I am excited to see what both PopCap/EA and Zynga produce in the years to come!

  • e.h.

    This deal is about the long-term results.  Not just money-wise, but the continuation of a brand.  Had PopCap been acquired by anyone other than EA, its identity would have become diluted.  EA’s position is that of allowing PopCap to continue operating using its proven and successful formula.  This isn’t just a win/win for the companies involved… It is an industry-wide win, as it lessens the chances of any future great games remaining as just concepts blocked by resource availability.

  • http://www.appatic.com Avatar X

    Ok, that confirms what i had commented about EA being nervous about Zynga already and that Zynga is indeed fully into going with more PopCap-like games and fully entering Mobile.

    No wonder why EA would be nervous about that.

    PopCap posture against a Zynga upfront deal for 1 billion is interesting and a bit shocking given the price. But i guess that they were pretty confident on EA paying up.

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