Thursday, October 21, 2010
EA buys Chillingo for under $20 million
Electronic Arts has snapped up Chillingo, a U.K. publisher of Angry Birds and other iPhone and iPad games, for less than $20 million in cash, according to sources close to the deal. Holly Rockwood, EA's spokesperson, confirmed the purchase Wednesday morning, but would not comment on the acquisition amount.
Chillingo is an aggregator and a distributor of mobile games based in the United Kingdom. Continuing from the LA Times article:
Its two top titles, Cut the Rope and Angry Birds, occupy the No. 1 and 3 spots on the chart of top paid apps in iTunes Wednesday morning. Cut the Rope, developed by ZeptoLab, sold 1 million paid downloads within the first 10 days of release on Oct. 7. Neither Rovio, which developed Angry Birds, nor ZeptoLab is part of EA's acquisition.
I think the deal is a "Meh" kind of buy. I like that EA's buying into new areas of strength in the gaming industry but as I've mentioned before, console gaming will always be where the big money and revenue is. All Things D had pegged the Chillingo buy at $80-$200 million which was optimistic but ~$20 million sounds about right for a morsel to be absorbed into the EA juggernaut. I also think EA should buy into online gaming distribution and that's Valve which operates Steam.
In related news, I've completed my buys into EA earlier this morning - a total of 5000 shares which will be held in the account for the next 5 years. I might write out-of-the-money calls against the position about 3 times a year to earn income but those shares won't be sold until 2015-2016 depending on how I view the overall market at that time. I'm concentrating on my Amazon position from here on out.