Melbourne-based video game studio Firemint, which gained international recognition over the past few years for the runaway success of its Flight Control and Real Racing games, has been acquired by entertainment giant Electronic Arts.
The move comes as EA, among a number of other entertainment conglomerates, attempts to improve its standing and dominate the mobile space. The company has recently acquired mobile development company Mobile Post Production to manage its focus on mobile and tablet gaming markets.
EA, which has a market capitalisation of $US6.7 billion, announced the acquisition overnight in a press release but did not disclose the purchase price.
However, although the company says the price “was not material”, the acquisition price is likely to have been substantial.
Last year, Disney purchased app developer Tapulous (led by Australian Andrew Lacy), and reports have pinned the purchase at around $US35 million.
While the Firemint acquisition was unlikely to be this big, the iOS developer is recognised as one of the leading game developers on the platform and would likely command a price of several million dollars.
“The Firemint team is remarkable for its critical and commercial success,” general manager of EA Interactive Barry Cottle says.
“Having them as part of EAi will accelerate our position as worldwide leader in game development for mobile devices and online gaming platforms.”
Both Electronic Arts and Firemint were contacted for comment this morning. No reply was received from Electronic Arts, although Firemint said a statement will be released later today.
Firemint is one of the biggest success stories out of the Australian video game scene. Just a few years ago the company was hurting after a major publisher cancelled a contract, when founder and chief executive Robert Murray took a punt on the iOS platform with Flight Control.
The firm has grown so fast it acquired another Melbourne studio, Infinite Interactive, at the beginning of the year.
Now the game, along with the Real Racing franchise, has netted the company millions of dollars, and has provided it with a respectable number of awards. The success has also given it plenty of attention from international developers and publishers.
The move comes as smaller independent studios are now being sought out by major entertainment groups, including Disney which purchased iOS developer Tapulous last year. The mobile scene has proven far too lucrative to ignore.
EA has certainly been pushing forward on the iOS front. It has “ported” a number of its larger titles to the iPhone, iPod Touch and iPad platforms and has been expanding its revenue base in the process.
By acquiring smaller firms which specialise in areas such as mobile development, it allows EA to create a number of different titles around a single IP and increase its earnings.
Indeed, EA Interactive general manager Barry Cottle told the Wall Street Journal that “this is an overall trend for the industry”.
“You’ll start seeing more of these acquisitions as opposed to the large-scale type because of the nature of openness of the marketplaces. It creates opportunities for third-party independents.”
This is probably why Firemint took the deal, especially as Robert Murray recently told SmartCompany that the studio has quite a solid portfolio of work already.
While the company has been a success over the past few years, and has moved away from work-for-hire contracts in favour of original IP, the video game development industry in Australia is far from stable.
In January, Murray told SmartCompany the work-for-hire market is growing thin, especially as the Australian dollar continues to climb. Coming under the EA banner will give the company security.
“We’re actually in a very different space compared to the rest of the industry. There’s work for hire, and self-publishing… We’ve distanced ourselves from the work-for-hire work for some time.”
“I can’t imagine that area of work performing too effectively when the dollar is too high. It’s good for us, but it’s a bit tougher on the work-for-hire market.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
