Electronic Arts will buy SimCity-maker Maxis in a US$125 million stock swap. The companies said Thursday the transaction will be completed by the end of August, subject to the approval of Maxis stockholders.
The 11-year-old Maxis has been struggling of late, reporting a $1.7 million loss for its most recent fiscal year. Over the past year, its stock has fallen from $25 to less than $11 a share.
Competition is keen in the electronic-games industry, and the bigger players have been eating up the small game-makers. Electronic Arts is considered one of the giants in the industry, generating $625 million in sales on such popular games as John Madden Football, NBA Live, and PGA Tour Golf.
Maxis has been planning to roll out a host of new products this year, including the long-awaited SimCity 3000. The company has sold more than 7 million units of the Sim line since its inception.
The merger will give Maxis the resources it needs to grow and distribute its games around the world, Maxis CEO Sam Poole said. "We have had a long working relationship with Electronic Arts. We distribute our products through the EA chain in Australia, Southeast Asia, and the Netherlands," Poole said.
For Electronic Arts, the deal gives them one of the best-selling games on the market. "Maxis' talented team has created a highly successful franchise for its 'Sim' family of entertainment products," EA chairman and CEO Larry Probst said in a release.
A spokesperson from Electronic Arts said the company has no official plans to purchase other game-makers, but she would not rule out the possibility of additional deals in the future.
