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EA Takeover Moves and Countermoves 120

Posted by Zonk from the i-love-marketroid-speak dept.
Details have emerged regarding several EA takeover related stories. The long running dispute with Digital Illusions may be coming to an end as EA has waived the requirement to own majority shares in the company. They still plan to purchase as many shares of the company as possible. Ubisoft announced that they have a defense planned against a hostile takeover bid from EA, should it arise. No mention of what this plan is, of course. In reaction to the recent press coverage of their move to purchase Ubi stock, EA has announced that their purchase was not hostile, and that they'd spoken often with Ubi representatives. From the article: "Florin reiterated that Electronic Arts was not asking for a seat on Ubisoft's board. 'We had the opportunity to buy a 20 percent stake in Ubisoft and we haven't asked for anything... That's not hostile. In our industry, one doesn't make hostile moves because our value lies with people,' he added."
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EA Takeover Moves and Countermoves More

EA Takeover Moves and Countermoves

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  • In our industry, one doesn't make hostile moves because our value lies with people

    Considering how EA treat their employee, I can't believe they have the gall to say this...

  • Maybe shareholders should take notice. (Score:5, Interesting)

    by glrotate ( 300695 ) on Saturday January 15, 2005 @03:56PM (#11374765) Homepage
    If EA is so eager to buy these companies maybe the current shareholders ought to be asking their boards what value EA sees that they haven't been able to realize.

  • Such BS... (Score:4, Insightful)

    by Krankheit ( 830769 ) on Saturday January 15, 2005 @04:00PM (#11374795)

    "our value lies with people," - Companies exist to make money, not care about people. What kind of BS line is this?

    • Re:Such BS... (Score:4, Interesting)

      by PhotoBoy ( 684898 ) on Saturday January 15, 2005 @04:16PM (#11374849)
      That line is hilarious coming from the company that has been outed as treating its coders like slaves.

      • RE: treating its coders like slaves (Score:5, Interesting)

        by Jace of Fuse! ( 72042 ) on Saturday January 15, 2005 @06:47PM (#11375656) Homepage
        You know what bothers me about hearing this these days in regards to EA?

        I heard this same thing in the early 90's from coders who used to work for EA back in the 80's but left to start their own companies.

        Many of EA's great early works of classic gaming history were coded by people who have long since left. I can't remember WHO said it, but I believe (though I may be wrong) it was either someone from the Bard's Tale (Interplay) or Starflight (Binary Systems) development teams that said something to the effect "EA likes to find stary eyed young programmers with big dreams of success and lure them into slavery with empty promises." (My parahprase since it's been so long.)

        I wish I knew who said it and what exactly they said but since it was in a print magazine long ago I haven't been able to find reference to it now days.

        Apparently this isn't new for EA. If I remember someone in the 90's saying it about EA from when they worked there in the 80's, I wouldn't have any reason to believe they are any better today.
    • I suppose it is a matter of perspective. People drive all business, plain and simple. Of course, I'm sure your comment is result of the infamous livejournal post about EA overworking their employees. For the slashdot coverage see: http://games.slashdot.org/article.pl?sid=04/11/11/ 0031259&tid=98&tid=10

    • Re:Such BS... (Score:4, Insightful)

      by EricTheMad ( 603880 ) on Saturday January 15, 2005 @04:26PM (#11374910)
      "our value lies with people,"
      - Companies exist to make money, not care about people. What kind of BS line is this?

      True, but you can't make money without people. Innocent, niave people that you can work to near death and pay almost nothing.
    • well said, and especially true at bullshit companies like EA.
      The games industry constantly promises huge bonuses and royalties to its staff, then once the game is shipped those same employees are sacked or get a $50 bonus. Its a disaster. Meanwhile the directors park ferraris and jaguars in the reserved parking spaces.
      The only royalty checks I've seen in 4 years at working for big companies are the ones I get from my little hobby games. Still haven't seen a bonus either.
    • They aren't called the Evil Alliance for nothing.,,
    • But companies (corporations like EA in particular) only exist because people allow them to.
      • Corporations are the rightful pinnacle of human development, which is why we let them get away with almost anything. We exist at *their* leisure now, pray that you remain useful.
      • If by "people allow them to", you mean "no person is powerful enough to stop them", I totally agree.

        It's not like I get a vote or anything.
        • Well, that $50 in your pocket for their next game is your vote. Its just that people are overwhelmingly voting for them, purely out of ignorance.
    • That line induced yet another coffee spit-take.

      Thanks, EA.

    • Re:Such BS... (Score:5, Interesting)

      by torinth ( 216077 ) on Saturday January 15, 2005 @05:28PM (#11375249) Homepage
      He means that EA doesn't want to piss off the great senior talent at Ubisoft. The game industry as a whole is talent-centric, just like the movie industry. There are lots of peons on the bottom that get abused like crazy, but there are also a number of key talents in production, concept, art design, and maybe even programming that determine whether a company has any value.

      In response to a hostile takeover, it's likely that many of these people would leave. Then the taken over corporation is just a worthless and empty shell and all the money spent buying into it did nothing but destroy a brand and earn the runaway talent a bunch of news for their next competing project.

    • Of course. (Score:3, Funny)

      by Srass ( 42349 ) *
      Of course they lie with people. They can't use computers to lie, nobody's come up with software to emulate a P.R. department yet.
      • really? I'd say a perl script should be perfectly capable of spreading the usual marketing fud. If you want to make it stay up-to-date simply have it scour recent press-releases when it's bored to find new catchy phrases.
    • What the statement means is that a company is mostly valued for the people working in it. Buying up a going concern and liquidating it will significantly reduce the value. In other words, companies have little value on the books, compared with the value of the work that is being done.

      The liscences held are valuable, but most of them are one-offs that would be market failures if they suffered from a delay caused by mass developer exodus during acquisition. After that, Ubisoft would never get another movie l
    • our value lies with people,

      Meaning that their value AND their (managing) people are liars? Yeah I believe them ^_^
    • "Companies exist to make money"

      Actually , your line is the BS. company exist for many reasons , the principle of a company are to fulfill a a need others whont or cant do by themself.

      If the goal of your comapny is to make money , in this day and age you will fail and go bankrupt in less then 2 months.

      Some people like you may not realize this but there are hundreds if not millions of company going bankrupt for one wich stay alive.
    • No, you mis-heard. He meant to say "our values involve lying to the people"...
    • They said that because "people are an exploitable resource", which means much the same thing, sounds too callous.

  • value lies with people (Score:5, Insightful)

    by downlo ( 529531 ) on Saturday January 15, 2005 @04:19PM (#11374867) Homepage
    "because our value lies with people."

    Are these the same people who worked OT and never got paid?

  • oh really? (Score:4, Insightful)

    by lordkuri ( 514498 ) on Saturday January 15, 2005 @04:21PM (#11374878)
    That's not hostile. In our industry, one doesn't make hostile moves because our value lies with people,' he added."

    yes, but only when they're valuable for 80 hours a week.

    note to mods, here's the point of this joke [slashdot.org]

  • Interpretation (Score:5, Funny)

    by mjfgates ( 150958 ) on Saturday January 15, 2005 @04:22PM (#11374884)
    " In our industry, one doesn't make hostile moves with a gun because our value lies with beating people."

  • Why EA is doing this (Score:5, Interesting)

    by Anonymous Coward on Saturday January 15, 2005 @04:25PM (#11374902)
    I think EA is just doing this to keep people guessing and to put their competitors on the defensive.

    For basically no cost to EA (they have tons of cash in the bank anyway) they managed to make Ubi (a competitor) hold several emergency board meetings and probably tied up all of senior management for several weeks. Instead of concentrating on making their products, they have to respond to press and government inquiries and come up with a defense strategy.

    Furthermore, they got Vivendi involved and probably caused at least some distraction in the management of every other medium-sized publisher. _And_ they diverted some attention from the difficulties EA is having acquiring Dice.

    I don't think they really care if they acquire Ubi or not. If it looks doable in a couple months, there's some value there and they'll go ahead. If not, then they probably got a nice short-term return on an investment of some of their spare cash.

    • Re:Why EA is doing this (Score:1, Funny)

      by Anonymous Coward
      For basically no cost to EA (they have tons of cash in the bank anyway) they managed to make Ubi (a competitor) hold several emergency board meetings and probably tied up all of senior management for several weeks. Instead of concentrating on making their products, they have to respond to press and government inquiries and come up with a defense strategy.

      In my experience, senior management getting tied up for several weeks is usually a good thing when it comes to concentrating on making your products...
    • Perhaps you're right--Dell wanted to mess with Ubi's and Vivendi's management. Still, that won't stop game development! When has management ever significantly HELPED development!
    • For basically no cost to EA (they have tons of cash in the bank anyway) they managed to make Ubi (a competitor) hold several emergency board meetings and probably tied up all of senior management for several weeks. Instead of concentrating on making their products, they have to respond to press and government inquiries and come up with a defense strategy.

      I wonder how much "senior management" is involved with making any products ;)
  • In our industry, one doesn't make hostile moves because our value lies with people,' he added."

    I guess that game developers don't qualify as people then.http://yro.slashdot.org/article.pl?sid=04/11/ 12/0537234&tid=123&tid=156&tid=10 [slashdot.org]

  • hostile purchasing? (Score:3, Insightful)

    by Antonymous Flower ( 848759 ) on Saturday January 15, 2005 @04:40PM (#11374974) Homepage
    Hostile purchasing is sort of bewildering. I think back to a time when men made tools for the sake of selling them to other men so the town could prosper(think free software movement). I can't imagine any type of hostile purchase in a market setting (You know, markets, those things they had a long time ago. Think Wal-mart without the flourescent lighting). How did this perversion of economics take place?
    • I can't imagine any type of hostile purchase in a market setting. How did this perversion of economics take place?

      A monopoly occurs when a single firm in a free market gains enough production power to sell (at the market price) to everyone in a given market. A free market is maintained if all of the firms selling in the market remain small enough to compete with each other. Your town setting is a free market, and it is maintained because every entity in the market is one or two people, almost by defi
    • "Think Wal-mart without the flourescent lighting" Shopping for toothpaste in the dark would suck.

  • Ubisoft's defense (Score:5, Funny)

    by aonifer ( 64619 ) on Saturday January 15, 2005 @04:44PM (#11375000)
    "You must have Administrator rights in order to buy shares in this company."
  • ... but not making the move would have been stupid.

    The way the 20% shares have been available indicates that EA can't have planned it. Its previous owner needed cash and decided suddently to sell them all at once.
    EA had the cash, so it would have been stupid not to buy them even if it didn't know what to do after ...

  • The Wal-Mart of Video Games (Score:5, Insightful)

    by Anonymous Coward on Saturday January 15, 2005 @04:52PM (#11375044)
    The similarities between Electonic Arts' recent practices and those of the world's largest retail company Wal-Mart should be ovious to those with rudimentary economics knowledge.

    Electronic Arts can use its leverage and sheer breadth of titles to outcompete others through volume. Wal-Mart also cuts their profit margin very thin, but makes up for it in volume.

    If I sell 10000 video games at a profit of $1 a game, and you sell 1000 video games at a profit of $5 a game, I win.

    The caveat here is that I have to sell 10 times as many games as you do, which leads to increasing the workforce output in order to increase production time and meet quotas.

    Wal-Mart, too, has resorted to cutting its labor costs as dramatically as possible in order to maintain its standing as a volume-based retailer.

    However, Electronic Arts is unlike Wal-Mart in a very particular way: they rely on a discretionary product to make their money. Whereas everyone presumably needs T-shirts, food, and chairs, and thus will always *need* Wal-Mart (or at least its products), video games are nonessential and are one of the first things to disappear from a household budget when money is tight.

    Unless EA begins to make high-quality games that move to the top of the pack, they will implode the next time a major recession hits. And judging by their volume-over-creativity track record, this is unlikely.
    • " they will implode the next time a major recession hits." Did the last recession end?? Someone should have told me!
    • The only way EA will implode is if we go well beyond mere depression. The worst thing that might happen is that the company officers might have to only buy one or two new homes that year and a bunch of low-level employees get laid off. Now, if absolutely everyone stopped buying anything and everything EA-related for five years, they would go so far into debt that the company would never recover and would have to sell its IP off to satisfy the requirements of being allowed to fold up gracefully, but the odds
    • Unless EA begins to make high-quality games that move to the top of the pack, they will implode the next time a major recession hits. And judging by their volume-over-creativity track record, this is unlikely.

      Actually, you don't even need the economy to cooperate. (For one thing, video games weather bad economies fairly well because while they are expensive, they are the best bang for the buck, bar none, in interactive entertainment, especially if you raid the bargain bin. My score today, a new Baldur's G [ign.com]

      • Depends. (Score:3, Interesting)

        by mcc ( 14761 )
        Once the reputation for mediocrity sets in... Slashdot is on the cutting edge of this here, the public hasn't seen it, but they will... they'll go into a death spiral.

        Mainstream music has a reputation of mediocrity but that doesn't hurt its sales one bit. People don't care about the mediocrity because their expectations have been adjusted down until they assume mediocrity is the normal state of things; more than that, they assume that mediocrity is unavoidable, and not only is there no reason they should
        • My point is more subtle than that. There is a sharp cross-over point between "profitable" and "death-spiral". For all the "crap" that the music industry is claimed to put out, you're basically not facing facts if you don't realize that yes, a lot of people like it.

          Additionally, music isn't software. Mediocre music is mediocre. Mediocre software crashes.

          Once the company dips into unprofitability once (for some time period), for any reason, it's over, and it's pretty clear that the video game industry is ru
        • A sizable portion of the video game market buys Madden every year just because it's Madden, without thinking of whether there might be alternatives.

          Actually that is brand loyality. Once they get used to Madden and it gives them what they want (a decent football game) then why look for alternatives? ESPN NFL 2k5 is great but many footbal fans tend to get one football game for a year at least ones I know.

          Halo 2 was declared by many sources game of the year sight unseen, just because those sources thought

    • Re:The Wal-Mart of Video Games (Score:4, Informative)

      by cgenman ( 325138 ) on Saturday January 15, 2005 @11:32PM (#11376931) Homepage
      video games are nonessential and are one of the first things to disappear from a household budget when money is tight.

      Ironically, the opposite is true. Generally in times of bad economic news, people become more escapist in their discretionary entertainment spending. And what is more escapist than video games? The golden years for 16 bit systems correlated pretty well to the recession of 92, and PS2 sales (which had been good before) really got traction when the economy tanked. When things are going better, people tend to go outside or take vacations or eat out with their discretionary income.

      Atari, Acclaim both imploded for lack of quality reasons... Because they had become synonymous with terrible games. They were an anti-brand, essentially. However, EA owns a lot of different brands, and publishes for even more. This past year they've put out a good version of Madden, a great version of Tiger Woods, Burnout 3, The Sims 2... They've published Black and White, Medal of Honor, Ultima Online, Command and Conquer, Majestic... The list goes on and on. Unlike Acclaim, some of the games with EA's name on it are really good. And the additional labels add insulation. When you think of Sim City, do you think of EA or of Maxis?

      EA is part of the gaming ecosystem, like it or not. They make and distribute more games than any other publisher out there, by a pretty solid margin. We should work to change EA for the better, rather than hope they will implode. Maybe if we could convince them to release a system of their own they would realize the importance of tending a garden rather than going for the slash and burn.

      • Atari, Acclaim both imploded for lack of quality reasons... Because they had become synonymous with terrible games. They were an anti-brand, essentially. However, EA owns a lot of different brands, and publishes for even more. This past year they've put out a good version of Madden, a great version of Tiger Woods, Burnout 3, The Sims 2.

        Of course, Acclaim published Burnout 2 though. I'm glad EA could pick up where Acclaim left off. It's one of the funniest games I've played in a long time. I wonder how man

  • EA bites (Score:1, Insightful)

    by pieisgood ( 841871 )
    I don't want EA to take over a good game company. EA makes those shitty sports games, and with new workers they could make even MORE shitty sports games. I also don't want Far Cry 2 to fall into the wrong hands and turn into another Need For Speed Underground, that would hurt the soul. Fuck off EA.
    • EA sports games aren't truely shitty but could use another look at the code. In Madden 2003, players walk through each other at times. ESPN NFL 2k5 is great but no more. EA is just making a series to make money and to entertain people. However, if they aquire enough brands that people like, they will dominate the market and I, for one, won't welcome our fascist video game overlords.

  • Boycott EA Please... (Score:1, Insightful)

    by Anonymous Coward
    I cant stress how much I hate this company... I would like to ask every sports game fan who will be missing out on a great offering from Sega ESPN NFL2k6 because of this bullshit licensing buyout to not give in and buy Madden* next year!

    I haven't seen anything good come from EA's yearly sport releases in so long, with the exception of Fight Night. NHL finally became playable this year, but still sucks compared to ESPN...

    Yes this is a rant, its also a plea, please do not buy EA games, rent them if you have
  • are these the same guys who brought us quality pinball action in the earlier half of the 90s?

  • Umm. (Score:2)

    by mcc ( 14761 )
    and that they'd spoken often with Ubi representatives

    And that's why the Ubi Soft CEO was going to the media and going "this came out of the blue without warning, and this is an industry where such investments are usually communicated about to the company ahead of time, which is why we don't know how to interpret this except as hostile"?

    Hmm.

  • Poison Pill? (Score:2, Interesting)

    by mr100percent ( 57156 ) *
    News Corp, (parent of Fox) is owned by Rupert Murdoc, and he's fighting tooth and nail to keep control of it. The board adopted a "poison pill" strategy to prevent Malone from seizing control. How did he do that? Are there any ways Ubisoft can do the same?

  • For ages they never had a title ported to Linux.

    When Vivendi bought Sierra they dictated Tribes 2 should be stopped being produced for Linux.
    check out Tribes 2 "sold out" [tuxgames.com] ref: Loki Games [lokigames.com]

    The code is there - the binaries are there - the cost is zero -
    they allowed Windows users to download a free Tribes 2 [fileplanet.com] .. but won't allow even Linux users purchase one any more.

    I say .. fucking die the lot of them.

    I accept economical ones but those were not. .. These people deserve having their scrotum ripped off - and
  • They need to hire Michael J Fox to work in the mail room real soon now.

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