Electronic Arts continues to beef up its cloud-based gaming offerings. Today it was announced that it is buying ESN, developers of the Planet web-based games framework, for an undisclosed sum. The two companies had already been working together, namely on Battlelog, an online social-web component for EA’s Battlefield 3. The news was announced on ESN’s blog.
“We couldn’t be more excited about this opportunity and the team is looking forward to focus all of its energy on DICE [EA's existing Swedish studio], Battlelog and the Battlefield series,” the company’s founders write.
In addition to the Planet framework for web applications, ESN has two other products for games developers looking to publish content on the web: Beaconpush and Sonar. The first of these, Beaconpush, is a push service for developers creating real-time web apps using HTML5 WebSockets and Comet. Sonar, meanwhile, is a cloud-based hosted service, available via an API, that developers can use to integrate voice communication into their online games.
Taken together, this couldbe a sign that EA could use the platforms to bring in more third-partly publishers under the EA umbrella, but it could also be a way for EA to build up its own games. We understand from a source that EA is likely, at least at first, to use it more for the latter. EA has been using ESN’s technology for the Battlelog web component of Battlefield, and “that technology is very valuable to EA and its systems,” our source says. Nevertheless, it’s a small team of under 25 people and is unlikely to be a massive acquisition. The acquisition, we’ve heard, was actually completed back in June, but the companies only decided to announce it today.
We are reaching out to EA for a comment on how ESN will fit in with its strategy. The company has confirmed the acquisition to TechCrunch on the phone — but it has declined to elaborate on how the acquisition will fit with its strategy, or how large the deal size is.
In the blog post announcing the deal, ESN also notes that it is on the lookout to hire more developers.
EA already had Dice in Sweden so this is a sign that the two will continue to work together in the country. We are reaching out to ask more questions, as well as to see if we can get more clarity on the financial terms of the deal.
Electronic Arts, which started as a games publisher for consoles, has over the last few years been trying to reposition itself to be closer to where its audience is moving: into online social and casual gaming and mobile. In that, it has had some run-ins with other companies also trying to keep strong positions in those spaces. It is currently suing Zynga, alleging that the social games maker’s The Ville is a ripoff of its Sims Social Facebook game.
Buying studios like ESN are a large part of how it hopes to continue beefing up its digital, online gaming business. In the last quarter, Q1 FY2013, EA noted that GAAP net revenues for its digital business were $342 million, compared to $592 million for net publishing packaged goods revenues.
The move to rethink its games as “services” rather than packaged goods has also meant some restructuring, as CEO John Riccitiello pointed out in its quarterly earnings call in May. Just yesterday it was announced that it was closing the Dublin office of PopCap, making nearly 100 employees redundant, as part of a bigger re-org and downsizing of the Seattle-based studio, which EA bought in July 2011 for $750 million, with a potential earnout taking that to $1.3 billion.
In July, the company said that Q1 FY GAAP net revenues were $4.1 billion. EA expects to have lower GAAP net revenue in the current quarter, of between $3.90 to $4.05 billion.