Major corporate acquisitions happen all the time, so the recent news that Amazon was on the verge of acquiring game maker Electronic Arts was not surprising. However, conflicting reports quickly emerged, and no one knew whether or not the studio responsible for The Sims, Battlefield, and FIFA would be under new management.
It’s an old story: a small indie studio creates a genuinely good game that becomes a huge success, and then a large company comes along and buys that studio. Sony’s $3.6 billion acquisition of Bungie was a recent and somewhat surprising acquisition. For those who are unfamiliar, Bungie’s breakthrough title, Halo: Combat Evolved, was one of the games that helped the original Xbox stand out in a console market dominated by Sony. Bungie was an indie studio at the time, but it was quickly acquired by Microsoft. Then there were the numerous Halo sequels and spinoffs, as well as newer franchises such as Destiny. Now we’re in an unusual situation in which a new Halo game could, and most likely will, be a PlayStation exclusive.
What would Purchasing EA get Amazon?
Electronic Arts is a gaming industry behemoth. Since its inception in 1983, the company has produced some of the largest and most successful games in history. Among the action games in EA’s library are the Battlefield series, Dead Space, Mass Effect, Dragon Age, Army of Two, and Apex Legends. Then there are sports games like the FIFA series, Madden, NBA Live, and many more. Oh, and they’re also in charge of The Sims, which is supposed to involve guiding virtual characters towards a better life but instead serves as gaming’s premier murder simulator.
EA isn’t just EA, on top of everything else. EA has acquired many smaller gaming companies over the years, just as it could be acquired. Its notable acquisitions include Dice, the creator of the Battlefield series, Respawn, the creator of Titan Fall, and RPG developer BioWare, best known for Baldur’s Gate, Mass Effect, and Dragon Age. EA currently operates more than 40 studios around the world (via Video Games Chronicle).
Where did the rumors come from?
While EA is one of the bigger fish in the games industry, there are plenty of other companies that are far, far bigger. So the idea that EA could be acquired by one of the world’s most successful corporations isn’t too far-fetched. The rumors of an EA takeover, and its first links with Amazon, appear to have been sparked by a Puck article that made two key claims. The first was that “Electronic Arts have held talks with a number of different potential suitors, including Disney, Apple, and Amazon.” Second, according to a source, “EA has been persistent in pursuing a sale, and has only grown more confident in the aftermath of the Microsoft-Activision deal.”
With large takeovers in the game industry, EA’s current owners interested in a merger, and Amazon allegedly among the companies in EA’s sights, the stage was set. Amazon has the resources to buy a majority stake in a company the size of EA, but the developer would be its largest purchase by far. EA has a market cap of around $36.74 billion (the total value of its current shares). Amazon’s most expensive acquisition to date has been Whole Foods, which cost the retail giant approximately $13.7 billion in 2017. With all of the key ingredients in place, news outlets may have been looking for hints that a deal was being discussed. On Friday, one of USA Today’s affiliates reported.
Is Amazon going to acquire the gaming giant?
So, is Amazon planning to buy one of the gaming industry’s big boys? Most likely not. The rumor first made headlines when a company, Good Luck Have Fun (GHLF), distributed the story. GHLF’s website does not publish news; instead, it provides gaming coverage to other outlets. One of those outlets is USA Today’s gaming section, For The Win (FTW), where this story first appeared. The story quickly spread to other media outlets and the online community as a whole. There was only one major problem. The story turned out to be untrustworthy.
The article was quickly modified to state that the claims had been refuted, and an editor’s note at the top of the piece claims that GHLF originally ran a story that “violated [its] editorial standards,” and that the piece used several “unnamed and unvetted sources.” The original article was removed and replaced with one claiming that the takeover was “rumored.” The new piece cited CNBC, which claimed to have spoken with its own sources and concluded that an Amazon takeover of EA was not on the horizon.
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The Associated Press has rules governing the use of anonymous sources, and while they only apply directly to its newsrooms, they can be used as best practice guidelines. If GHLF had followed AP’s sourcing guidelines, this rumor might not have spread. For example, if the source was run by a news manager, additional scrutiny could have resulted in the story being canceled.
If the leak is interesting enough, a story about a potential takeover may be considered using anonymous sources. However, it is the responsibility of the outlet to vet those sources.