Microsoft says it is not interested in Electronic Arts
24 Sep 2009
A Microsoft spokesman has clarified that the company has no plans to take over video game maker Electronic Arts (EA) according to a MarkeWatch report.
According to a Reuters report which cited information gathered from traders the software giant was interested in buying Electronic Arts, the publisher of the Madden, Medal of Honor and FIFA video game series.
Though only a rumor, an acquisition would significantly boost Microsoft's presence in the video game.
US video game sales dropped in August for the sixth straight month as per the figures from NPD Group with analysts pointing to disappointing sales for the latest game in the Madden series.
However though EA has been recently downgraded by Goldman, it has a potential winner in The Beatles: Rock Band game. The Redwood City, California-based firm's latest offering is expected to be a top seller this holiday season it takes on rivals Activision Blizzard and 'Grand Theft Auto' publisher Take Two Interactive, whom it had pursued for eight months, before abandoning a $2-billion takover bid in September 2008.
According to analysts the likelihood of a deal was extremely low considering EA derived too much of its revenue from Microsoft competitors Sony Corp, maker of the PlayStation 3 player and Nintendo Co which sells the Wii.
They say there was simply no way that the software giant could make the math work due to the massive hit to EA' s revenue and earnings post-acquisition. They also point to regulatory hurdles which would be difficult to clear.