EA’s $1.4B Playdemic purchase strengthens its mobile strategy

Electronic Arts has acquired Golf Clash creator Playdemic from WarnerMedia for $1.4 billion in cash as EA shores up its sports game portfolio.

That’s a lot of money for a development studio with just one game, but a free-to-play Golf Clash has been a big moneymaker, with 80 million downloads over the past four years. GamesBeat hears that Playdemic generated $200 million in revenue last year and had a profit (earnings before interest, taxes, depreciation and amortization, or EBITDA) of $80 million.

Measurement firm Sensor Tower said Golf Clash generated approximately $185 million in gross revenue last year along with adding about 5.3 million first-time downloads. All-time, the game has amassed more than $780 million in player spending and 58 million downloads, based on Sensor Tower’s estimates.

This means that EA won’t have to work that hard to generate a steady profit from the studio in the United Kingdom. But paying seven times the revenues of Playdemic is a high price and a sign of the times in gaming, where heavy acquisition activity is boosting company valuations.

While EA is working on big triple-A games like Battlefield 2042, it is also investing in mobile game projects such as Battlefield Mobile.

Meanwhile, AT&T gets another $1.4 billion to help pay down debt related to its transaction to spin out WarnerMedia in a deal with Discovery for $43 billion.

Warner Bros. Games president David Haddad said in a statement that his company will focus on the company’s storied franchises, likely meaning the ones that have a close connection to Hollywood properties such as Game of Thrones: Conquest, Harry Potter, and Lego Star Wars.

Above: Golf Clash has 80 million downloads.

Image Credit: Playdemic

The deal is the third major acquisition EA has made seven months, as it bought Glu Mobile for $2.4 billion in February and U.K.-based Codemasters for $1.2 billion in December. This deal will help EA in its competitive battle in golf, where it faces off against Take-Two Interactive’s 2K label with PGA Tour 2K21.

Golf Clash is a whimsical title for casual golf fans. Mobile has also become the biggest part of the market, and EA could use more help expanding in a space where other companies (Supercell, Activision Blizzard’s King, and Tencent) are thriving. Golf Clash is a “quickfire” multiplayer golf duel that is a lot closer to something like Mario Golf than Madden NFL.

Market researcher Newzoo anticipates mobile will be $90 billion, or 52% of the overall $175 billion game market in 2021. And mobile is thriving and growing faster than the overall game market, according to mobile data and analytics firm App Annie. App Annie said consumers spent $1.7 billion per week in mobile in Q1, up 40% from pre-pandemic levels, while mobile game downloads grew 30% in Q1. Players downloaded more than a billion games per week in Q1 on iOS and Google Play.

Playdemic was founded in 2010 by CEO Paul Gouge, and the company has around 65 employees. Liontree served as an adviser for Playdemic. EA added more than 500 developers of mobile games with its acquisition of Glu, and EA already had a sizable mobile game portfolio with titles like Star Wars: Galaxy of Heroes prior to the deals.