EA Acquires Bioware/Pandemic News

In an industry-trembling move, Electronic Arts has today announced that it has acquired VG Holdings, the owner of Bioware and Pandemic Studios, from Elevation Partners in a deal worth up to $810 million (£396.83m). Some of the details surrounding the deal have already emerged, with VG Holdings purchased for $620 million with an additional $155 million for 'certain employees' of VG Holdings, and a $35 million loan to VG Holdings until the closure of the deal, due in January 2008. The deal dwarfs the $377 million Microsoft forked out for the 2002 acquisition of Rare.

The two development studios were brought together in November 2005 in a $300 million deal by Elevation Partners, and are currently working on ten franchises - of which, six are wholly owned internally. Forgoing the fact that EA was already lined up to publish Pandemic Studios' Mercenaries 2: World in Flames in 2008, the biggest question remains with Bioware and their upcoming Xbox 360 behemoth, Mass Effect. Although Microsoft Game Studios is set to publish the game next month, the brand is owned by Bioware, which surely leaves the door open for future instalments to become multi-platform releases? Further still the deal throws some doubt over the future of Bioware's tantalising partnership with SEGA on the untitled Sonic RPG title.

Before teaming up with Pandemic, Bioware's experience laid squarely on the PC and Xbox, with the likes of Buldur's Gate, Neverwinter Nights, Knights of the Old Republic and Jade Empire. The likelihood of future Bioware titles also heading to PlayStation 3 is the latest blow for Microsoft, who could previously count on the close relationship with BioWare that is unlikely to continue under the control of EA. The Xbox 360 producer has already seen the acquisition of Bizarre Creations by Activision and the re-emergence of Bungie Studios as an independent outfit within the last few weeks.

One of the founding figures of VG Holdings' previous owners, Elevation Partners, was John Riccitello - now CEO of Electronic Arts. Speaking about the acquisition, he said: "These are two of the most respected studios in the industry and I'm glad to be working with them again. They'll make a strong contribution to our strategic growth initiatives on quality, online gaming and developing new intellectual properties...We also expect this will drive long-term value for our shareholders."

"Pandemic Studios remains focused on attracting the best talent and creating blockbuster action games," said Josh Resnick, President and Co-founder of Pandemic Studios. "As a worldwide publishing leader, EA represents the ideal partner to bring our titles to market as global entertainment events."

"We are truly excited by John Riccitiello's new vision for EA," said Ray Muzyka, Co-founder and CEO of BioWare Corp. "This vision is consistent with BioWare's focus on crafting the highest quality story-driven games in the world. It will enable us to further the careers of the passionate, creative and hard working teams at BioWare Edmonton and BioWare Austin."

[UPDATE] In a webcast Conference Call held in the aftermath of today's news, EA has described the deal as 'mutually beneficial' for both Bioware/Pandemic and their new parent company. Furthermore, the publisher confirmed that the ten titles currently in development at the newest members of the EA family would be released over the course of the next four years, with Bioware Austin's Untitled MMO somewhere towards the 'back end' of the period - 2011, seriously?!?