The PocketGamer.biz Mobile Mavens is our panel of experts drawn from all sectors of the mobile gaming industry.
With unnamed sources citing a possible shock move for EA by Korean publisher Nexon, so PocketGamer.biz's thoughts turned towards the motivation behind such a deal, and whether other plays for big western publishers by Asian outfits could follow.
So, we asked the Mavens:
Is talk of Nexon's interest in EA a sign the publisher has switched from predator prey, and more widely as major mobile forces in Asia look to expand their hand in western markets, what other North American or European firms could you see being targeted?
Acquisition speculation is a favourite pastime of industry watchers - and spreading speculative rumours one of the favourite PR strategies of analysts and bankers.
And sometimes they are right. After all, if you call wolf - and dragon, and mouse - often enough you eventually have to be right.
It's interesting, though, that this was even hyped up as a possibility. Few, I'd argue, would have seen EA as a potential target for many, most likely because of its size.
It also reminds me of GREE and DeNA's respective buyouts in the west in recent years, though those were naturally of a far smaller scale. Asian firms have a real drive to expand in the west, though the question remains whether you can truly understand a market if you resort to simply acquiring another firm that operates in it?
Is there no way the games delivered by such firms could be tooled to appeal to the west without acquisitions?
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I think the question should have been "Can EA resist being acquired by somebody?"
My view is that, in the light of Zynga's valuation, EA is not serving its shareholders as well as it should. Last time I looked, EA was the third largest games company based on market cap in the US behind Zynga and Activision.
There are several Korean, Chinese and Japanese companies, many of which aren't day-to-day names, that have the capital to offer a reasonable premium to shareholders to buy EA, whether EA wants to be sold or not.
I haven't looked closely at how EA's shares are distributed, but I pre-suppose that no individual could block a sale?
My conclusion is that Nexon can't muster the resources to bid for EA, and consequently don't offer a "threat", but others can and Nexon may have stirred the hornet's nest.
The market will change as it always has. Hidden players will show up soon on the international market.
I was expecting more mergers and acquisitions activity this year already. We see several companies which have a strong home market, need to go global, enter new areas and have a great war chest. In my opinion we will see companies not only from the US, but also from China, South Korea, Japan and Russia joining the international dance floor soon.
Also the M&A activities will not only come from such gaming companies. Other industries have been watching our s for quite some time now.
I'm sure they will soon start an acquisition spree. Everyone has a price.
John is co-founder of PR and marketing company Big Ideas Machine. Also an all-round nice guy...
I don't see EA as a logical fit for Nexon, regardless of whether the company can afford it.
Having dealt with several of the leading Japanese games companies over the years, the majority of the M&A deals came from situations where there was already significant synergies with the companies: for example, Namco and Bandai, Square and Enix.
Even in those cases, where games and IP were complimentary and strategy was aligned, there were lots of challenges.
I know it's a bit of a generalisation to moot cultural differences as a reason not to consider M&A, but where are the synergies? EA's IP is generally Western-focused. It has spent heavily on mobile and online social, and needs time for those investments to work.
Where are the advantages in Nexon in taking on those challenges - on top of the issues around the merger of two very different businesses?
It may be that EA's current direction and leadership is not serving shareholders as well as it could. But do we really think that shareholders would see this as a preferable option?
