EA Buys Respawn Entertainment

In a very unusual turn of events, EA announced the purchase of  Respawn Entertainment – a very talented group of developers, who helped to build Titanfall 1-2.

EA will pay $151 million in cash for Respawn, up to $164 million in long-term equity, and a maximum of $140 million in performance milestone payments, Eurogamer reports. Kotaku previously stated that South Korean publisher Nexon had made an offer to buy Respawn first. But EA had 30 days to match Nexon’s offer and they won.

Here’s the full announcement.

Electronic Arts announced today an agreement to acquire Respawn Entertainment, a leading independent game development studio and creators of AAA shooter and action games including the critically-acclaimed Titanfall franchise. Respawn brings to EA the proven leadership and studio talent behind Titanfall and Titanfall 2, two of the most highly-rated shooter titles in the last five years. The acquisition builds on a successful publishing partnership between Respawn and EA, with multiple projects currently in development – a new title in the Titanfall franchise, a game set in the Star Wars universe and a VR gaming experience.

“We’ve seen firsthand the world-class caliber of Respawn as a development studio with incredible vision, deep talent and an inspiring creative mindset,” said Andrew Wilson, CEO of Electronic Arts. “Our longtime partnership is grounded in a shared desire to push the boundaries and deliver extraordinary and innovative new experiences for players around the world. Together, we’ve brought this to life in the Titanfall franchise, and now with the Respawn team joining EA, we have exciting plans to accomplish even more amazing things in the future.”

“We started Respawn with the goal to create a studio with some of the best talent in the industry, and to be a top developer of innovative games,” said Vince Zampella, CEO of Respawn Entertainment. “We felt that now was the time to join an industry leader that brings the resources and support we need for long term success, while still keeping our culture and creative freedom. EA has been a great partner over the years with Titanfall and Titanfall 2, and we’re excited to combine our strengths. This is a great next step for Respawn, EA, and our players.”

Respawn is the creator and developer of the critically-acclaimed Titanfall franchise that energized the first-person shooter genre with its innovative gameplay. The first game, Titanfall, was published by EA in 2014, and received global recognition with more than 75 top awards. Fans and critics fell in love with the game’s refreshing, fast-paced multiplayer gameplay. Respawn and EA launched Titanfall 2 in late 2016, with a new single-player campaign and expanded multiplayer gameplay, resulting in one of the year’s top-rated shooters.

Respawn will join EA’s Worldwide Studios organization, a global creative collective of leading game development studios bringing to life an unmatched portfolio of top games and services across all major platforms.

Under the agreement, EA will pay $151 million in cash, and up to $164 million in long-term equity in the form of restricted stock units to employees, which will vest over four years. In addition, EA may be required to pay additional variable cash consideration that is contingent upon achievement of certain performance milestones, relating to the development of future titles, through the end of calendar 2022. The additional consideration is limited to a maximum of $140 million. The transaction is expected to close by the end of the calendar 2017 or soon thereafter, subject to regulatory approvals and other customary closing conditions. The acquisition is expected to be neutral to EA’s net income in fiscal years 2018 and 2019.

Respawn is working on a number of titles. The company is building a new Titanfall, a new Star Wars game, and a VR-project (which is probably another Titanfall spinoff).

A couple of weeks ago we’ve reported about EA closing Visceral Games. Let’s hope it won’t happen with Respawn.