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Monday, November 09, 2009

Electronic Arts Buying Playfish; 2Q EPS Falls Short

By Kathryn Elizabeth Tuggle

FOXBusiness

Video-game giant Electronic Arts (ERTS) said Monday it has agreed to purchase Playfish, a maker of social network games, for about $275 million.

Electronic Arts will integrate Playfish into its interactive business as the company has made efforts in recent months to beef up its Internet gaming division. EA currently makes games for Nintendo’s (NTDOY) DS and Wii game systems, and may employ Playfish technology in making these games.

EA has agreed to pay $25 million in equity retention to Playfish, and the company’s owners stand to receive $100 million in cash if Playfish reaches profitability goals by 2011.

Separately, EA said it lost $391 million, or $1.21 a share, in the second quarter, compared with a year-earlier loss of $310 million, or 97 cents a share. Excluding items, the company earned 6 cents, versus a loss of 6 cents a year ago.

Analysts polled by Thomson Reuters were calling for earnings of 7 cents a share in the quarter.

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