EA Buys Playfish for $275 Million

Last month a report surfaced indicating that Electronic Arts would be buying social gaming company Playfish. Today EA confirmed the news, announcing that it acquired Playfish for $275 million in cash and $25 million in equity retention arrangements. Furthermore, "the sellers are entitled to additional variable cash consideration, up to a maximum of US$100 million, contingent upon the achievement of certain performance milestones through December 31, 2011."

The deal allows EA, which already does quite well in the casual sphere with Pogo, to gain a solid grasp specifically on the social games space. Playfish has over 150 million games installed and played worldwide on platforms such as Facebook, MySpace, Google, Bebo, iPhone and Android. In the last several months, Playfish increased its base from 35 million users to roughly 60 million. Facebook hits like Pet Society, Restaurant City, and Country Story  drive more than 1 billion gameplay sessions every month.

“Social gaming, with its emphasis on friends and community, is seeing tremendous growth and this is the right time to invest to strengthen our participation in this space,” said Barry Cottle, Senior Vice President and General Manager of EA Interactive. “EAi has been successfully leading the charge for EA, and with the addition of proven expertise from Playfish, their broad consumer base and strong game brands, we’re moving ahead aggressively in our plans to lead in the category of cross-platform social entertainment.”

"The industry is undergoing dramatic transformation and joining EA is the ideal opportunity for us to push forward our goals to lead in the social entertainment evolution on a faster and much larger scale," said Kristian Segerstrale, CEO and Co-founder of Playfish. “EAi’s vision and entrepreneurial culture are consistent with our own, and together, we are in position to be the company that defines new and innovative connected experiences that will change the way people play games.”

EA has struggled to post a profit in recent quarters, but the company is a big believer that the web will be a huge growth driver for the company and the games industry in general.