Video game powerhouse Electronic Arts has agreed to buy Glu Mobile for $2.4 billion in a major move to beef up its mobile gaming offerings amid the pandemic-fueled boom in virtual entertainment.
According to EA, the combination of the two companies will create a mobile product portfolio that “includes more than 15 top live services across fast-growing genres with a combined $1.32 billion in bookings over the last twelve months.”
Glu Mobile, which was founded as Cyent Studios in 2001 and went public in 2007, is known for publishing celebrity-focused titles such as “Kim Kardashian: Hollywood” as well as “Design Home,” “Covet Fashion,” and “MLB Tap Sports Baseball.”
Under the terms of the deal, EA will pay $12.50 in cash for each Glu share, a premium of about 33% to the closing price on Monday. “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,” Electronics Arts CEO Andrew Wilson said in a news release.
Mobile games accounted for about half of the nearly $175 billion that consumers worldwide spent on videogame software last year, according to analytics firm Newzoo BV. As The Wall Street Journal reports, EA is “best known for making console and computer game franchises such as FIFA and Battlefield” while mobile “makes up the smallest — and slowest growing — portion of the company’s net bookings.
In the holiday quarter, typically the company’s most lucrative period, mobile net bookings grew 3% to $191 million. The acquisition of Glu Mobile comes two months after EA bought racing game developer Codemasters for $1.2 billion.
“The move is analogous to Activision Blizzard’s acquisition of Candy Crush maker King in 2015, serving as an expensive way to break into the lucrative mobile space,” The Verge said. According to VentureBeat, Glu “specializes in bigger-budget mobile games, often with full 3D visuals” but also “focuses on free-to-play games that run for years and generate revenue from microtransactions. That is the business model that EA has repeatedly told investors it wants to emphasize in the future.”