Week that was

PG.biz week that was: EA's $1.35B PopCap buyout, UK App Store prices bumped up, Android loses favour with developers and Steel Media swoops for AppSpy

The past seven days' news compressed bite-sized

PG.biz week that was: EA's $1.35B PopCap buyout, UK App Store prices bumped up, Android loses favour with developers and Steel Media swoops for AppSpy
With the odd trip to Helsinki thrown in for good measure, it has been a typically busy week at PocketGamer.biz; the world of app stores, smartphone platforms, developments in mobile game making and assorted technology.

There's no doubt EA's buyout of PopCap – following on from previous acquisitions of Chillingo, Playfish and Firemint – drew most attention this week, both in terms of the (potential) $1.35 billion the publisher paid out, and the rumoured $1 billion rival bid from Zynga.

In truth, EA's move was more complex than billed by much of the press, consisting of $650 million in cash, $100 in shares, $50 million over four years for staff retention and, depending on PopCap's profits, $550 million in earnout, too.

It's also a move EA funded by taking out a $550 million loan from Morgan Stanley, UBS and Morgan Chase – a debt that would be paid back in stock options.



But, aside from the financial ramifications, attention was also focused on how EA employees would react to the large payout, resulting in an internal email from CEO John Riccitiello to all staff explaining the reasons behind the deal.

Early reports suggest its impact had been overwhelmingly positive.

If the thinking is EA paid too much for the studio, however, anyone expecting to pick up Rovio can expect to part with even more cash.

Money matters

The Finnish firm's reply to EA's move was to suggest any future IPO by the Angry Birds studio will be coupled with a valuation 'somewhere north' of PopCap's. Buyout offers or no buyout offers, one thing Rovio isn't short of is confidence.

The only story that came even close to matching the word count devoted to both EA and PopCap this week was the unannounced arrival of an App Store price rise.

Coming days after Piper Jaffray claimed the average price of an app on the marketplace was already on the rise, and Deutsche Bank analyst Chris Whitmore assessed that iOS users spend around $100 on apps for their devices, the App Store was suddenly subject to a 14 percent rise in app prices in the UK.



Despite springing up out of the blue, developers took the news almost universally well, with some even surmising it might even benefit studios in the long term.

That's more than can be said for the apparent loss of share for Apple in the UK. Though sales continue to be strong, the giant's share of the pie on British shores has fallen by 18 percent as Android has motored past according to Kantar Worldpanel.

"We are yet to see any real signs of consumers switching between Android and Apple," clarified global consumer direcor Dominic Sunnebo.

Getting out of Android

Indeed, things might be rosy for Google in terms of sales, but support for Android in amongst developers is actually falling according to Flurry's numbers, owing to the allure of both iPad and Verizon's iPhone 4 in the US.

Google's priorities, Flurry said, should be updating Android Market and stamping out the remaining fragmentation issues – the former benefitting from the launch of a rejuvenated mobile client for the marketplace this week.

Android's problems pale in comparison to those of some of its rivals, however.

Steve Ballmer took time out during Microsoft's Worldwide Partner Conference that Windows Phone has gone from "very small to very small" since launch.

Far from conceding defeat, also announced at the event were four new phones from ZTE, Acer, Fujitsu and Samsung, all on the way in time for the roll out of the next version of the platform, Mango.

RIM, too, has suffered mixed fortunes of late. BlackBerry App World has managed to pass 1 billion downloads, but it's a figure that pales in comparison to the 15 billion and counting made on Apple's App Store to date, and is a way behind the 6 billion amassed on Android Market.



Meanwhile, relatively newfound rival HP took the decision to drop the Palm name from both its smartphone and tablet offerings moving forward.

 

The outfit has now been rebranded as the webOS Global Business, coming just days before the firm's first tablet, TouchPad, rolled out in the UK.

Shipment shock

The worst news of the week, however, was reserved for Sony Ericsson, which posted a net loss of €50 million loss in Q2 2011, owing to (in the firm's view, at least) a drop in shipments in the wake of the Japanese earthquake.

"We estimate that the impact of earthquake-related supply chain constraints on our portfolio was close to 1.5 million units, with most of the effect in the early part of the quarter," said CEO Bert Nordberg of the news.

On the numbers front, publisher Gameloft had more reason to celebrate, with the announcement that its social system Gameloft Live! has hit 4 million subscribers, albeit at a somewhat slow pace.

Indeed, Gameloft remains a small player in the field, dragging some distance behind the 90 million signed up to OpenFeint.



Battles between specific social networks aside, it's the impact of social gaming as a whole that may dominate the agenda in the years to come.

While tablets may no longer be cannibalising sales of more traditional gaming systems according to Resolve Market Research, the advent of mobile gaming will make it harder for handhelds such as 3DS and PS Vita to find an audience according to THQ.

That's an admission that makes the publisher's decision to sell of the bulk of its mobile business to 24MAS in February harder to stomach.

One firm with no intention of letting its mobile focus slip is Steel Media – the publisher behind both PocketGamer.biz and PocketGamer.co.uk.

This week saw the firm announce its acquisition of AppSpy, the Australian based site responsible for the largest collection of YouTube video reviews for iPhone and iPod touch games on the web.

Expect next week's summary to be delivered in video form, then...

With a fine eye for detail, Keith Andrew is fuelled by strong coffee, Kylie Minogue and the shapely curve of a san serif font.