Electronic Arts: Acquisitions and Closures
Gaming titan has been marked by a contentious pattern: acquiring studios for their intellectual property (IP) and talent, then shuttering them when profitability wanes
Introduction
Electronic Arts (EA), founded in 1982 by Trip Hawkins, began as a publisher championing developer creativity, branding programmers as "software artists." However, its evolution into a $35 billion gaming titan has been marked by a contentious pattern: acquiring studios for their intellectual property (IP) and talent, then shuttering them when profitability wanes. This paper analyzes EA’s acquisition strategy across four decades, examining how corporate priorities, market shifts, and managerial decisions led to the closure of over 30 studios, eroding creative diversity in favor of centralized control.
The 1980s–1990s: From Collaboration to Consolidation
Bullfrog Productions (Acquired 1995, Closed 2001)
Background: Founded in 1987 by Peter Molyneux, Bullfrog pioneered genre-defining titles like Populous (1989), the first god game, and Syndicate (1993), a cyberpunk strategy classic.
Acquisition: EA purchased Bullfrog for $44 million, seeking to capitalize on its innovative design ethos.
Closure: Post-acquisition, EA restructured Bullfrog into "EA UK," mandating focus on licensed games (Harry Potter) over original IP. By 2001, key staff had departed to form Lionhead Studios, and EA dissolved Bullfrog.
Origin Systems (Acquired 1992, Closed 2004)
Background: Creators of the Ultima RPG series and Wing Commander, Origin revolutionized narrative-driven PC gaming.
Acquisition: EA bought Origin for $32 million in stock, aiming to dominate the RPG market.
Closure: EA redirected Origin toward MMO development (Ultima Online), but mismanagement of Ultima IX (2001) and canceled projects (Ultima X) led to studio-wide layoffs.
Westwood Studios (Acquired 1998, Closed 2003)
Background: The Command & Conquer (1995) developer redefined RTS games with live-action cutscenes and multiplayer innovation.
Acquisition: EA paid $122.5 million to acquire Westwood and its sister studio Burst, seeking control of the C&C franchise.
Closure: EA mandated a shift to 3D engines (Command & Conquer: Renegade), alienating fans. Westwood’s final project, Earth & Beyond, underperformed, prompting EA to absorb the studio into EA Los Angeles.
The 2000s: The "Evil Empire" Era
Pandemic Studios (Acquired 2007, Closed 2009)
Background: Known for Star Wars: Battlefront (2004) and Mercenaries (2005), Pandemic combined open-world chaos with polished mechanics.
Acquisition: EA acquired Pandemic alongside BioWare for $775 million, aiming to counter Activision’s Call of Duty.
Closure: Pandemic’s The Saboteur (2009) underperformed, and EA shuttered the studio during a 1,500-employee layoff.
Maxis (Acquired 1997, Closed 2015)
Background: Will Wright’s SimCity (1989) and The Sims (2000) redefined simulation gaming.
Acquisition: EA purchased Maxis for $125 million, seeking to monetize The Sims’ modding community.
Closure: After Spore (2008) and SimCity (2013) faced backlash for restrictive DRM, EA closed Maxis’ Emeryville studio, pivoting The Sims to mobile-focused teams.
The 2010s: Live Services and the Mobile Pivot
Visceral Games (Closed 2017)
Background: Makers of Dead Space (2008), Visceral blended survival horror with cinematic storytelling.
Closure: EA mandated a live-service model for Dead Space 3 (2013), introducing microtransactions. After Battlefield Hardline (2015) underperformed, EA canceled Visceral’s Star Wars project (codenamed Ragtag) and shuttered the studio.
BioWare Mythic (Closed 2014)
Background: Known for Dark Age of Camelot (2001), Mythic transitioned to Warhammer Online (2008).
Closure: EA merged Mythic with BioWare in 2009, but Star Wars: The Old Republic’s high costs and Dungeon Keeper Mobile’s predatory monetization led to closure.
Analysis: Patterns and Consequences
Corporate Playbook
Acquisition for IP: EA targeted studios with proven franchises (Command & Conquer, Dead Space) but often discarded their identity (e.g., rebranding Westwood to EA Pacific).
Monetization Over Innovation: Studios like Visceral and Maxis were forced into live-service models, alienating core fans.
Centralized Control: Acquired studios lost autonomy, with EA mandating engine shifts (e.g., Frostbite for BioWare) or genre pivots.
Financial Impact
High Costs, Low ROI: EA’s $860 million purchase of Pandemic/BioWare yielded only Mass Effect as a lasting IP.
Shareholder Pressure: Layoffs and closures often followed quarterly earnings misses, as with the 2009–2010 restructuring.
Conclusion:
For every success (Respawn Entertainment), there are shuttered innovators (Bullfrog, Westwood). As gaming pivots to subscription models (EA Play) and other aspirations, EA must balance shareholder demands with the creative risks that birthed its iconic franchises.