The video gaming world is reacting to news reports that Amazon.com Inc (NASDAQ:AMZN) might be interested in acquiring the biggest video game company in the world, Electronic Arts Inc. (NASDAQ:EA)
EA is a digital entertainment company known for developing games such as The Sims, Madden, FIFA Ultimate Team and Apex Legends. The speculation was first reported by USA Today, but has since been refuted by CNBC.
Mark Elfenbein, CEO of X1 Esports and Entertainment Ltd. (CSE:XONE), said EA is one of the remaining global crown jewel media companies, and would provide Amazon access to one of the largest groups of Generation Z users.
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“Following the announcement of the Microsoft acquisition of Activision there has been growing speculation that both EA and other large video game companies like Take Two Interactive will be the next to fall,” Elfenbein told Proactive.
“For any entity to acquire EA the price will exceed US$40 billion and there are only a few companies globally that could pull this off.”
According to Elfenbein, Disney would be an ideal acquirer as they can integrate the EA brands into theme parks, cruise ships, streaming, adding they have already done this with the Star Wars and Marvel franchises.
“However at a $200 billion market cap, a $40 billion acquisition may be too large even for Disney. Amazon would easily have the financial resources to acquirer, having a greater than $2 trillion market cap and enjoying success with streaming live video game network Twitch, as well as its streaming game service Luna. However it needs to be pretty comfortable that regulators would be likely to allow the purchase to go through before committing itself financially to an acquisition,” he said.
According to Elfenbein, gaming has become the new social media.
“Multi-player gaming became the primary source for 10 to 30 year olds to socially communicate and, moving forward, gaming unites the world as it puts any person globally on an even playing field with society,” Elfenbein said.
Electronic Arts shares were up 6% just before midday, at US$135, up by $2 from the opening.
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