Electronic Arts, the videogame developer and distributor, announced on Tuesday that it will buy Virginia-based Mythic Entertainment.
The acquisition - of undiclosed price - comes after a challenging year for EA and the video game industry. Consumer spending has decreased as anticipation for next generation consoles mounts. In its most recent earnings data, the company reported net revenues of $641 million or a loss of 0.05 percent per share.
The purchase of Mythic is one of the EA's largest in recent times. The 200 employee Mythic is known for creating games that fall into the category known as massive multi-player online role playing game and puts EA into a position to further increase its online presence and get back on the road to profitability.
â€œThe addition of Mythic to the EA family reflects our deep commitment to the online gaming market worldwide. Mythic will bring one of the industryâ€™s most talented MMORPG teams to EA, Paul Lee, president of EA Studios, said in a statement.
The Redwood City, Calif.-based company has other offerings in the online arena. The Sims Online and the war-based Battlefield series have kept the country's leading video game publisher on the Internet-based gaming radar.
Citing the purchase, Kaufman Bros. analyst Todd Mitchell on Wednesday raised his rating for the video game publisher to buy from hold with a $52 price target.
Mythic Entertainment primarily focuses on developing online role playing games. Its title, Dark Ages of Camelot, has earned critical acclaim, being named Online Game of the Year by Computer Games Magazine and Computer Gaming World, and PC Game of the Year by USA Today and MSNBC.
Originally founded as Interworld Productions, the company eventually changed to its current name in 1997. Mythic Entertainment will operate as a wholly-owned studio dedicated to developing MMORPGs.
Full year 2007 revenue guidance is between $2.7 to $2.95 billion. Earnings per share is projected to be between a loss of $.15 to a gain of $.15. Revenue for the first quarter of 2007 is projected to be $300-340 million, with EPS losses forecast at $0.42-0.36.
Electronic Arts was up 85 cents to $42.26 on the NASDAQ stock exchange in afternoon trading on Wednesday.