Electronic Arts jumps on Amazon report

Electronic Arts Inc. found itself the subject of takeover speculation on Friday, sending its shares up as much as 16 per cent in early trading before the report was walked back and other news outlets refuted the possibility of an imminent deal.

A report published in USA Today by GLHF — a gaming and esports site and content partner of USA Today’s For the Win column — said Amazon.com Inc. could announce as soon as Friday an offer to acquire EA, the publisher of hit games Apex Legends, FIFA and Madden titles. The news sent EA’S shares surging early Friday morning before David Faber cast doubt on the report on CNBC following its publication. Later, USA Today added a note at the top of the original story saying that it “violated our editorial standards regarding the use of unnamed and unvetted sources” and the story was revised.

EA and Amazon declined to comment on the report. EA shares were up 4.9 per cent at 11:56 a.m. in New York, valuing the company at US$37 billion.

It has been a banner year for deals in the video game industry, from Microsoft Corp.’s pending US$69 billion purchase of Activision Blizzard Inc. to Take-two Interactive Software Inc.’s acquisition of Zynga for US$11 billion. The sector boomed during the pandemic and, although sales have slowed this year, gaming companies are still seen as attractive sources of longterm revenue thanks to titles that can be monetized for years after they launch. Live-service games, which are continuously updated over time, and microtransactions made within games accounted for 71 per cent of EA’S revenue last fiscal year.

Amazon, too, has been on the hunt for deals this year, despite already being under intense antitrust scrutiny.