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EA Agrees to Acquire Codemasters for $1.2 Billion

EA Codemasters

In November, NBA 2K publisher Take-Two Interactive made an offer on F1 2020 and Dirt 5 developer Codemasters. According to the agreement, Take-Two Interactive would acquire Codemasters in the first quarter of calendar 2021 for roughly $994 million. This past weekend, rumors circulated that publisher Electronic Arts planned to top Take-Two’s bid. As it turns out, those rumors were true. EA announced this morning it’s agreement to acquire Codemasters for $1.2 billion.

Why would EA Acquire Codemasters?

EA acquire Codemasters
A screenshot from the F2 2020 Season Update for F1 2020, via Codemasters

“We believe there is a deeply compelling opportunity in bringing together Codemasters and Electronic Arts to create amazing and innovative new racing games for fans,” said CEO of EA Andrew Wilson in a press release“Our industry is growing, the racing category is growing, and together we will be positioned to lead in a new era of racing entertainment.”

In its strategic rationale, EA lists a number of ways it can help grow Codemasters. EA sites its “deep expertise in live services operations,” (for better or for worse) and its “global publishing, marketing and game development support capabilities.”

Codemasters has cemented itself as the prominent racing game developer with the success of its F1 and Dirt Rally franchises. As a result, Codemasters is a premium acquisition for developers who want to expand into the racing genre. EA is no stranger in the racing space. Several Need for Speed games have critical acclaim, including the recently remastered Need for Speed: Hot Pursuit. Burnout Paradise is one of the best driving games ever made. However, EA has more misses than hits. The best example of this? It’s two most recent racing games are both remasters.

Codemasters just released another free season update for F1 2020. DiRT 5 was a launch title on next-gen consoles. The duo of competitive racing franchises would compliment EA’s sports giants well.

EA’s Acquisition Graveyard

The biggest fear from an EA acquisition? The company has a rough track record of previous purchases. A quick google search reveals several lists that chronical EA’s history of shuttering its acquisitions, but here’s a quick list.

  • NuFX, who developed the NBA Street series before being purchased by EA in February 2004. EA renamed the studio EA Chicago, and it closed down in November 2007.
  • Headgate Studios, which eventually became EA Salt Lake. The developers at EA Salt Lake worked on the Front Page Sports Golf and Tiger Woods PGA Tour series. EA Salt Lake was refocused to work on mobile development, and eventually shuttered in 2017.
  • Black Box Games, the Canadian studio who developed Need for Speed: Hot Pursuit 2. EA acquired the team during the development of Hot Pursuit 2 as EA Black Box. The team went on to work on NHL games and the Skate series until the studio was closed in April 2013.

The acquisition of Codemasters by either EA or Take-Two also causes further consolidation. EA owns the right to simulation football, and the FIFA series is the big market player. Take-Two, likewise, publishes one of the only yearly basketball games. Is it good for the market that one of these two also owns the racing genre?

Unless EA is outbid, its acquisition of Codemasters is expected to be completed in the first quarter of calendar 2021.

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