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[Chan]

 

[EverydayBeast]

Star Wars games have been strong but they aren't recognized by the elites over at Resetera, BioWare has to decide if they want to continue to flood the gaming community with crap, I hope EA does something with Medal of Honor.

 

[DKPOWPOW]

Why though? Sony let Evolution studios go and they mostly ended up at Codemasters and Criterion. Why would they buy them back?
I think it's more likely that there is no buyer and some studios just get shut.

Well if they have any sort of business sense after the massive failure that was Concord...

I'd think they would start looking back on their catalog and realize they are sorely missing games like MotorStorm.

Or they continue on this path of foolishness.

 

[Ribi]

EA was bought by the Saudis to intentionally saddle it with debt so that it can accrue losses and and allow them to use those write-offs on other parts of their portfolios.

they may sell off Ips eventually, but no time soon.

This is purely an accounting trick for them to reduce taxes.

Saudi taxes? Does the prince just write himself a check?

 

[Gp1]

Given the historic, sell Bioware and Maxis to any Asian sweatshop for any price.

Better than continuing to pay these guys salaries.

 

[splattered]

They're going to sell all studios and Microsoft will be the sole purchaser... just because you didn't put that as an option haha

 

[Three]

Well if they have any sort of business sense after the massive failure that was Concord...

I'd think they would start looking back on their catalog and realize they are sorely missing games like MotorStorm.

Or they continue on this path of foolishness.

With a racing game studio though? They have the very successful PD and GT7 to expand on.

 

[pqueue]

Saudi taxes? Does the prince just write himself a check?

do you not understand that multinational companies still have to pay taxes in all countries they operate and make sales?

 

[WoJ]

I'm just here to say the OP doesn't know how profit works. Profit is after expenses so whatever interest expense EA has, it's already accounted for when reporting profit on their financial statements. Their interest payments don't "take up most of their profit." Interest payments also reduce what they actually have to pay tax on. If the interest rates they are paying are 9% they may want to restructure but there's a huge benefit for companies to use leverage to manage their business.

 

[YCoCg]

Codemasters and Criterion are gone no doubt

 

[Camreezie]

It'll be Motive and Codemasters with Bioware next on the chopping block. That Iron Man game has been coming forever with no actual progress and Dead Space remake was so far under their (admittedly stupid) expectations that they didnt greenlight DS2 remake. Codemasters probably isnt justifying its existence either.
Bioware getting closed off would get them the most heat which they'd want to avoid or they'd have done it already

 

[Three]

I'm just here to say the OP doesn't know how profit works. Profit is after expenses so whatever interest expense EA has, it's already accounted for when reporting profit on their financial statements. Their interest payments don't "take up most of their profit." Interest payments also reduce what they actually have to pay tax on. If the interest rates they are paying are 9% they may want to restructure but there's a huge benefit for companies to use leverage to manage their business.

OP said that EA is TAKING ON that debt (as part of the buyout) and for context their previous year profits was $2B. It's a new debt against a previous profit that did not take it into account.

 

[WoJ]

OP said that EA is TAKING ON that debt (as part of the buyout) and for context their previous year profits was $2B. It's a new debt against a previous profit that did not take it into account.

Ah fair enough. I stand corrected.

I misread the post and thought he was implying the PIF would force them to take care of existing debt. That said I'm not sure my opinion changes that much. Debt is cheaper than equity for these companies and with rates dropping they can still get the benefit of restructuring their debt. But their interest payments still aren't a 1 to 1 against profits based on how interest is deductible. All to say I don't think EA has to sell anything to deal with their debt. The debt and interest payments are a feature, not a bug.

 

[Wass0o7]

Sony would rather buy Peanuts then game studios.

 

[Ribi]

do you not understand that multinational companies still have to pay taxes in all countries they operate and make sales?

Not in America

 

[T-0800]

Well if they have any sort of business sense after the massive failure that was Concord...

I'd think they would start looking back on their catalog and realize they are sorely missing games like MotorStorm.

Or they continue on this path of foolishness.

Sony stopped making Motorstorm games because they didn't sell. I bought them but I only can only do so much.

 

[AJUMP23]

They have an injection of cash no need to sell.

They will shudder mass effect when BioWare fails with mass effect.

 

[Baki]

I'm just here to say the OP doesn't know how profit works. Profit is after expenses so whatever interest expense EA has, it's already accounted for when reporting profit on their financial statements. Their interest payments don't "take up most of their profit." Interest payments also reduce what they actually have to pay tax on. If the interest rates they are paying are 9% they may want to restructure but there's a huge benefit for companies to use leverage to manage their business.

No it has not. The debt is new and part of the LBO. So it has no been accounted for in their recent financial statements. Technically, debt still hasn't been issued, as deal still needs to be approved by regulators.

Edit: the debt to ebitda ratio is incredibly high. They certainly need to make massive changes to their business as current debt levels are not healthy. Certainly EA will be selling or closing non core assets.

Well if they have any sort of business sense after the massive failure that was Concord...

I'd think they would start looking back on their catalog and realize they are sorely missing games like MotorStorm.

Or they continue on this path of foolishness.

Evolution was closed 10 years ago. A lot has changed in that time. I can see Sony revisiting the arcade sim genre, especially in light of the success of the Forza Horizon series.

 

[Gamer_By_Proxy]

I don't think anyone is looking to buy more studios. If anything they'd entertain buying the IP.

 

[blacktout]

I saw the overconfident title boldly proclaiming what a company *must* do and knew immediately who made the thread.

Are you going to willingly eat crow when the things you are certain must happen don't come to pass?

 

[larrybrady]

Give metalhead software to someone who will fund them for a 3 on 3 arcade hockey …

 

[pqueue]

Not in America

Wrong.

Divisions that operate in other countries absolutely pay taxes in the other country.

 

[Ribi]

Wrong.

Divisions that operate in other countries absolutely pay taxes in the other country.

Not in America

 

[yurinka]

Why though? Sony let Evolution studios go and they mostly ended up at Codemasters and Criterion. Why would they buy them back?
I think it's more likely that there is no buyer and some studios just get shut.

An important part of Evolution (plus SCEE Liverpool Studio, plus Bizarre Creations, plus Supermassive) is at Firesprite. If Sony wants to make another arcade racing game in the future (they don't do them because they don't sell outside 2/3 IPs) won't need to buy anyone.

Evolution was shut down and did stop making games like Motorstorm because they didn't sell enough.

 

[DKPOWPOW]

With a racing game studio though? They have the very successful PD and GT7 to expand on.

Not sure what PD is, but I think we as gamers is sorely lacking a game like MotorStorm. Also feel like Criterion could take a crack @ Twisted Metal and finally bring the series back from the grave.

Sony stopped making Motorstorm games because they didn't sell. I bought them but I only can only do so much.

I mean I think the first sold pretty well considering the PS3 was the worst selling home console.

Evolution was closed 10 years ago. A lot has changed in that time. I can see Sony revisiting the arcade sim genre, especially in light of the success of the Forza Horizon series.

It would be nice to see them do so.

 

[Three]

Not sure what PD is, but I think we as gamers is sorely lacking a game like MotorStorm. Also feel like Criterion could take a crack @ Twisted Metal and finally bring the series back from the grave.

I mean I think the first sold pretty well considering the PS3 was the worst selling home console.

It would be nice to see them do so.

Polyphony Digital the makers of Gran Turismo. They would be better off making an arcade racing game through that engine with those car models to keep cost as low as possible.

I just don't think the market is going in that direction though, of reviving Motorstorm or even Twisted Metal. We're seeing a contraction. Current publishers are abandoning smaller titles to concentrate on already established major hits. It's the only reason EA would even sell those studios to begin with because they have the NFS and Burnout franchise which are bigger than Motorstorm.

 

[PlayStaytion]

I dislike the practice of reducing great games like Mirrors Edge and Mass Effect into expensive hard sell products, it's a false category.

 

[Baki]

Not in America

EA will remain a US company but with a foreign owner.

Not sure what PD is, but I think we as gamers is sorely lacking a game like MotorStorm. Also feel like Criterion could take a crack @ Twisted Metal and finally bring the series back from the grave.

I mean I think the first sold pretty well considering the PS3 was the worst selling home console.

It would be nice to see them do so.

Sony has been trying to get a Twisted Metal game off the ground, but no luck so far. They definitely want a game to cash in on the TV shows success.

Polyphony Digital the makers of Gran Turismo. They would be better off making an arcade racing game through that engine with those car models to keep cost as low as possible.

I just don't think the market is going in that direction though, of reviving Motorstorm or even Twisted Metal. We're seeing a contraction. Current publishers are abandoning smaller titles to concentrate on already established major hits. It's the only reason EA would even sell those studios to begin with because they have the NFS and Burnout franchise which are bigger than Motorstorm.

Insomniac leak specifically pointed out that Sony is considering a strategy for smaller Miles Morales type games, to have more frequent releases, and lower budgets. Sony is also rumored to be producing a 2.5D GoW. For Sony, who are all in on the transmedia pipeline (games -> movies/tv -> music -> merch), it makes sense to have frequent small releases, to keep an IP current in the public's eye.

I think Sony will bid, not neccessarily win, but bid for these assets:
- Mobile publishers (Playdemic or Glu Mobile) = Sony needs their infrastructure to break into mobile gaming
- NFS IP + Codemasters/Criterion
- BioWare + IPs (will be cheap, running costs low, Mass Effect plugs a gap in their portfolio)
- Ripple Effect (Sony probably wants a FPS and live service focused support studio)
- Motive (Can tie into their Sony Marvel Universe games, maybe even turn them into an Insomniac subsidiary)
- IPs they will want: Mass Effect, NFS, Dead Space, Medal of Honor for their own COD franchise, maybe SimCity for mobile, maybe Command & Conquer for mobile, maybe Ultima for its multimedia plans

 

[bitbydeath]

Two Point Studios should see if they can pickup anything Bullfrog related from them.

 

[Wastelander92]

Sony should get Bioware and Respawn along with related IPs.

 

[diffusionx]

We all know LBOs are usually a scam and I doubt this one is any different. But there is no way the plan to pay down their debt was predicated on them selling cash flow generating studios (non cash flow generating studios are worthless). The plan is surely for them to grow the company's revenue base to be able to pay down the debt and continue their operations.

 

[Baki]

Sony should get Bioware and Respawn along with related IPs.

EA will want to keep the Apex Legends Respawn team and any IP related to Apex Legends. BioWare up for sale. EA already tried before the debt situation, but wanted too high of a price and couldn't find buyers.

We all know LBOs are usually a scam and I doubt this one is any different. But there is no way the plan to pay down their debt was predicated on them selling cash flow generating studios (non cash flow generating studios are worthless). The plan is surely for them to grow the company's revenue base to be able to pay down the debt and continue their operations.

Big restructuring around core franchises is part of the reason they're going private. That probably means selling as many non-essential studios as possible, more outsourcing, and focusing resources on key franchises (BF, Apex, Sims, Sports) and platforms for expansion (mobile). That means studios that have low profitability due to ok-ish catalog sales and high dev cost because they're going into production for a new game, are prime candidates, good examples are BioWare, Motive, Codemasters and probably Criterion.

 

[yansolo]

I just want a football game that isnt made by EA