On Tuesday, PopCap games announced it was being acquired by Electronic Arts, confirming speculation that circled late last month. The deal is valued as high as $1.3 billion in cash and stocks. But the company reportedly also fielded a huge offer from social gaming giant Zynga.
Forbes reported that an unnamed “source close to the deal” revealed that Zynga offered $1 billion in cash for PopCap, which makes titles such as Bejeweled and Plants vs. Zombies.
The acquisition is a huge one for Electronic Arts — despite taking a hit on the market — as the gaming industry shifts to take social and mobile gaming more seriously.
Zynga, of course, recently filed for its own $1 billion initial public offering and is largely thought to be the dominant player on the social gaming scene.
But with EA’s reach and clout, the PopCap acquisition certainly sets up a huge foil for the FarmVille company in an increasingly competitive market.
In Zynga’s IPO filing, the company said that it has to spend a lot to hire new talent in an ever-growing field. EA has agreed to spend as much as $50 million to keep PopCap’s employees where they are for the next four years.
Zynga has also said that it has to continue to expand to other forms of entertainment to keep up, which is clearly the reason behind EA’s intended acquisition. In fact, Zynga named Electronic Arts as a competitor that it has to watch as it looks to expand its horizons in its S-1 filing.
“As we continue to devote significant resources to developing games for those platforms, we will face significant competition from established companies that may have far greater experience than us, including Electronic Arts Inc., DeNA Co. Ltd., Gameloft SA, Glu Mobile Inc. and Rovio Mobile Ltd.,” the company said.