EA has just announced plans to acquire Respawn Entertainment, the developer of Titanfall and Titanfall 2. The two companies had been partners for some time, with EA publishing both of Respawn’s releases, and now the partnership is growing even deeper with EA taking direct control of the company. The announcement also included the first hint of a brand new Titanfall game, which Respawn is working on alongside their already announced Star Wars title.
“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.”
Titanfall 2 has been critically acclaimed, but sales have been lower than anticipated. A few things factored into this, including poor long term reception to the first title in the series, and a release date that landed alongside Battlefield 1 and Call of Duty: Infinite Warfare. Many felt that Titanfall 2 was the better game, but standing out in the crowded shooter genre can be tough, even for an established franchise like this.
Some more details were shared…
“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.”