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Leading video game developer Electronic Arts (NASDAQ:ERTS) has announced the acquisition of KlickNation to strengthen its hold in social gaming. KlickNation is primarily a role playing game (RPG) developer for social platforms including Facebook. We believe the move depicts EA’s growing ambitions in social gaming and will help the company to compete more effectively against Zynga, the current market leader in social games, which is planning to price its IPO later this week. EA is an international developer, marketer, publisher and distributor of video games and competes with other game developers like Activision Blizzard (NASDAQ:ATVI), Take-Two Interactive Software (NASDAQ:TTWO) and casual gaming mainstays such as Zynga etc.
Pumped Up by Sims Social Success, EA wants to Go Full Throttle in Social Gaming
With the gaming landscape fast changing from retail to digital, social networking sites such as Facebook are emerging as serious gaming platform. EA has already tasted success in social gaming with Sims Social, which along with charting to #2 of most played games on facebook, contributed heavily in company’s success during last quarter. Now wired by the high popularity of Sims Social, EA is going all out in social gaming.
The acquisition of KlickNation comes after the $1.3 billion purchase of casual game developer Pop Games and will help EA immensely in harnessing its growing interests in social gaming. KlickNation develops some highly popular RPGs on facebook such as Superhero City, Age Of Champions and Starship Command. We believe that the acquisition of KlickNation will help EA in not just increasing its social gaming revenues but also in increasing its span of social game genres.
Trefis EA price estimate stands at $20.62, which is roughly 5% below current market price.