EA acquires Codemasters for $1.2 Billion [2020-12]

[Deleted member 11852]

All sales have to go through regulatory review. But that has nothing to do with anti trust issues and it will be easier for a company that doesn't control a market to purchase a company vs one that does

Not all sales need regulatory review, for example if I bought Hello Games (No Man's Sky) I wouldn't need regulatory approval. There are a number of triggers for regulatory review and sometimes more than one regulatory approval may be required. Microsoft buying Zenimax seemingly did although I'm not 100% sure why. I assume it's because this would result in a dilution of free market publishers in the video game industry but it's a bit unclear and the EU have not published anything yet which would set out their assessment process and decision.

If Microsoft were, for example, wanting to get in on the arms industry and wanted to buy BAE Systems (or just invest in it heavily), they would not need market regulation approval but would require a different approval as BAE Systems have of sensitive technology and it may not be desirable for it to have a majority foreign-owner.

 

[liams]

Not all sales need regulatory review, for example if I bought Hello Games (No Man's Sky) I wouldn't need regulatory approval. There are a number of triggers for regulatory review and sometimes more than one regulatory approval may be required. Microsoft buying Zenimax seemingly did although I'm not 100% sure why. I assume it's because this would result in a dilution of free market publishers in the video game industry but it's a bit unclear and the EU have not published anything yet which would set out their assessment process and decision.

If Microsoft were, for example, wanting to get in on the arms industry and wanted to buy BAE Systems (or just invest in it heavily), they would not need market regulation approval but would require a different approval as BAE Systems have of sensitive technology and it may not be desirable for it to have a majority foreign-owner.

In the US there is regulatory review on any company acquisition over 90 something million

 

[AzBat]

So how long do you think Codemasters makes it under EA? more than 10 years?

Instead of years shouldn't we be wagering on game releases instead? I say 2 game releases of below expected sales & it's gone.

Tommy McClain

 

[digitalwanderer]

Damn it, I liked Codemasters!

/me presses "F"

 

[ChuckeRearmed]

Damn it, I liked Codemasters!

/me presses "F"

Well, maybe people on the Internet liked Codemasters but the sales tell a different story in the end.

 

[digitalwanderer]

Well, maybe people on the Internet liked Codemasters but the sales tell a different story in the end.

I'm not disagreeing, but I'm still a bit sad.

 

[Deleted member 7537]

1.2 billion? I imagine F1 game should be selling millions. Dirt 5 launch was a bit of a disaster, although they are games the type of games that keep selling over time.

 

[Deleted member 7537]

Exactly. People throw word monopoly on MS all the time while Sony and Nintendo the ones who are close to be a monopolies.

Antitrust laws do not punish success, Google is the absolute monopoly in search and no one is after them. MasterCard and VISA dominate the electronic payment market, Intel and AMD have probably (until 2 months ago) 99% of the market of CPUs for desktop and laptops.

However, buying out your competitors, pricing services below their cost to kick out weaker competitors, imposing unfair rules due to position of dominance, that's illegal. And yes, Microsoft had to settle with US Goverment for monopolistic practices regarding their dominance in the OS market. Not because they dominated that market, but because they use their position to impose their rules on their competition.

https://en.wikipedia.org/wiki/United_States_v._Microsoft_Corp.

 

[Deleted member 11852]

Antitrust laws do not punish success, Google is the absolute monopoly in search and no one is after them.

The EU Commission directorate of monopolies would like you know what you are smoking? Most large companies are concerned by the EU's powers, it represents a massive market and unlike the US FTC, the EU tosses about out 100 million fines like a crack dealer distributing free samples at a frat party.

It's not a crime to be a monopoly, it is a crime - at least under EU law - to abuse that monopoly. the EU are the only global regulator to be harshly enforcing breaches of anti-trust legislation.

 

[Deleted member 7537]

The EU Commission directorate of monopolies would like you know what you are smoking? Most large companies are concerned by the EU's powers, it represents a massive market and unlike the US FTC, the EU tosses about out 100 million fines like a crack dealer distributing free samples at a frat party.

It's not a crime to be a monopoly, it is a crime - at least under EU law - to abuse that monopoly. the EU are the only global regulator to be harshly enforcing breaches of anti-trust legislation.

The EU is all about let’s punish these american companies for doing things we didn’t think of before. The EU is a joke, sadly, innovation has stalled and demographics don't help. Do they punish Airbus or french automotive companies for receiving illegal government subsidies? If Silicon Valley was located on the French Riviera Google wouldn't had have to pay a dime.

edit: OT

 

[Shortbread]

Google is the absolute monopoly in search and no one is after them

Speaking about that....

https://www.cnn.com/2020/12/17/tech/google-antitrust-lawsuit/index.html

As many as 38 state attorneys general filed the latest suit against Google Thursday. The suit alleges that the company has operated an illegal monopoly in the markets for online search and search advertising.

 

[Deleted member 7537]

Speaking about that....

https://www.cnn.com/2020/12/17/tech/google-antitrust-lawsuit/index.html

Again, that's not because they are monopoly in search, it's because the DOJ understand they are using that position to undermine competitors. If you see my initial post I'm replying to a comment "People throw word monopoly on MS all the time while Sony and Nintendo the ones who are close to be a monopolies.". Implying you are a monopoly because you have a huge marketshare in a specific sector. That's not the reason.

 

[Deleted member 13524]

I think it's downright impossible that the Dirt Rally series is worth $1.2B (which is what, 95% of Codemasters' value?) using standard valuation methods.
They're definitely not making that kind of money over a decade.

I wonder if this is just a result of the crazy market inflation that's been happening lately.
It's not like EA is lacking the talent to make racing games, either. They have a GT-clone in mobile with Real Racing, and the console+PC has lots of Need For Speed titles that AFAIK are successful enough.

Perhaps it is just a means to prevent the competition from making racing games.

 

[Shortbread]

I think it's downright impossible that the Dirt Rally series is worth $1.2B (which is what, 95% of Codemasters' value?) using standard valuation methods.
They're definitely not making that kind of money over a decade.

I wonder if this is just a result of the crazy market inflation that's been happening lately.
It's not like EA is lacking the talent to make racing games, either. They have a GT-clone in mobile with Real Racing, and the console+PC has lots of Need For Speed titles that AFAIK are successful enough.

Perhaps it is just a means to prevent the competition from making racing games.

https://www.theguardian.com/games/2...lectronic-arts-fifa-2021-harry-potter-f1-2020

EA and Investors take...

Some Codemasters shareholders had been unhappy at the board recommending New York-based Take Two’s offer at only a relatively modest premium that they felt undervalued the company.

“Our industry is growing, the racing category is growing, and together we will be positioned to lead in a new era of racing entertainment,” said Andrew Wilson, chief executive of EA.

Video games, especially sports games, have surged in popularity during the coronavirus pandemic, as matches were cancelled or played behind closed doors. Formula One racing ran its own esports tournament based on Codemasters’ software while real-world racing was halted. Shares in rival British video games makers have also surged over the last year with Team 17, the studio behind the Worms franchise, up 127% and Frontier Developments up 120%.

But as you mentioned...

“In some respects, EA’s move feels defensive, because they are already under attack from Take-Two and many of their franchises are becoming second rate relative to leaders,” said Neil Campling, an analyst at Mirabaud. “I think Take-Two Interactive can counter with a higher offer due to the long-term strategic value of Codemasters’ IP and technology.”

 

[ChuckeRearmed]

Antitrust laws do not punish success.

No, it is not about the success itself but the monopolistic behavior. Sony being a market leader attracts various companies and get cheaper deals, and despite being a leader it actively pursues that because - due to being a leader - it will get it easier. Those deal increase and solidify its market position. Unless MS pay much more than Sony - and even then - it cannot do the same.
It would be fine if Sony did not do that - after all the games would come to its platform too anyway due to have a biggest market share - but it actively pursues that [Playstation Advantage], and it does that because it close to a monopoly on a various markets.

 

[Deleted member 11852]

The EU is all about let’s punish these american companies for doing things we didn’t think of before. The EU is a joke, sadly, innovation has stalled and demographics don't help. Do they punish Airbus or french automotive companies for receiving illegal government subsidies? If Silicon Valley was located on the French Riviera Google wouldn't had have to pay a dime.

This was gone weirdly political and I"m not sure what you're talking about. The EU 'punish' EU Member States (as in Governments of EU countries who are infraction of EU law) and companies established in the EU, which most multinational companies are. Microsoft may be headquartered in Seattle, and Google and Apple in California, but their operations are global and they have arms of companies established in and operating across the EU. If you don't want to abide by a region's laws, don't set up business there.