Valve Employees: EA Attempted Buyout for Over $1 Billion

Sep 10, 2012 by  

Valve Electronic Arts Buyout Billion

DICE. BioWare. Pandemic. Playfish. PopCap. The list of interactive entertainment studios (or their parent companies) purchased by Electronic Arts over the last decade runs the gamut from established triple-A developers to budding social-media game upstarts.

According to a new story published by The New York Times, however, the oft-infamous acquisitioner has, for quite some time, had its eyes set on what would have been its largest grab to date: fellow industry giant Valve.

The article, published yesterday and offering a rare glimpse into the quixotic corporate culture of the Valve, cited testimony from two anonymous Valve employees claiming to have knowledge of private discussions between their firm and Electronic Arts. According to the employees, EA had attempted to purchase Valve for years, and was prepared to value the company at “well over” $1 billion if the talks had ever become substantial.

Valve founder and current head Gabe Newell wouldn’t acknowledge any potential offers, but he indicated that a buyout – no matter how lucrative – wasn’t part of his company’s vision for the future. Conversely, he suggests, the individualistic nature of Valve’s employees would see the studio “disintegrate” before submitting to any outside ownership:

“It’s way more likely we would head in that direction than say, ‘Let’s find some giant company that wants to cash us out and wait two or three years to have our employment agreements terminate.’ ”

Even for Electronic Arts, $1 billion is a lot of money – their 2007 purchase of VG Holding Corp, BioWare and Pandemic Studios’ parent company, holds their buyout record at $775,000,000 – but it’s not surprising to see Newell loathe the idea of acquisition altogether.

There’s no question – playing Half-Life or Portal, considering the smorgasbord of innovation that has been Steam, and even deciphering (or at least trying to) its cryptic approach to public relations – that Valve’s success is a direct result of its distinct originality, its independent and creative spirit in an industry where, like any hotbed of intense competition, it’s easy to be an imitator.

Valve Buyout Attempt EA

And their stock seems to be rising. The NYT article cites Wedbush Morgan analyst Michael Pachter, who values Valve today at around $2.5 billion. With the company’s ever-growing interest in hardware design also referenced in the story (we reported this April on Valve’s initiative to create a virtual reality headset); Steam Big Picture looking to further connect the PC with the TV (the Big Picture beta was released today, as it happens); and Half-Life 3 rumors persisting (when are they not?); Valve’s status as an easy buyout candidate appears as it always has with Newell at the head: nonexistent.

Ranters, how would you envision Valve under the wing of Electronic Arts? Do you admire Gabe Newell, if buyout attempt report is accurate, for not cashing out?

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Follow me on Twitter @Brian_Sipple.

Source: The New York Times

27 Comments

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  1. Runs the gamut, not gambit ;)

    Also, possibly the least shocking game news ever. Ugh, EA

  2. Runs the gamut, not gambit ;)

    Also, possibly the least shocking game news ever. Ugh, EA. Good on Gabe.

    • Posting from mobile it said my post failed, sorry for the repeats.

  3. Valve better not be acquired by EA. The innovation would die out quicker than a black death patient in the Middle Ages.

  4. Why compete with Steam when you can just buy it and fold it into Origin. Great plan, EA. Someone PLEASE buy out EA and fire the jerks working there who keep screwing things up.

    • Ha. You’d have to be mega-rich to buy out EA. Like Apple or Microsoft.

      • Well, right now nexon has enough money to buy out EA, so you don’t have to be a monopoly to buy them

    • I completely agree. EA is just ridiculous. Still not as bad as Activision, but still pretty bad. EA would ruin Valve. I hate Origin. Steam is so much better.

  5. Despite their whole making us wait a decade between games, Valve is my last hope for truly immersive gaming…

  6. YAY! so happy someone is more interested in original games and ideas instead of looking for a quick payday. Stay Beautiful, Gabe Newell & Co.!

  7. And besides, once they release Half Life 3 or HL2: Episode 3, or whatever, they’ll probably make well over $1 Billion in profits, lol. Just kidding, but they will definitely make a whole lot of money from it…

  8. Absolutely terrible idea if Valve sells to EA.

  9. How would I see Valve under EA? Alot like Bioware, makings games people have wanted, but somehow screwing it up so much that they lose a crap ton of fans. Like suddenly in L4D3, you are fighting aliens instead of zombies. That’s the momentous stupidity that Valve would be moved to under EA.

    • Also, it would be following the pay2win model and be played in a browser. The graphics would have a comic look to them of course, because that is how WOW did it and the textures are cheaper to make.

  10. EA buying out Valve would be a disaster for the games industry. I can’t think of any developer EA purchased being successful long term. Imagine not just getting Half Life 3 but 4, 5, 6 etc. year after year. Of course it would be cookie cutter crap not the great Half Life experience we all expect.

    Then there’s Steam, I’m sure they would add some nice draconian DRM and being close to a monopoly on digital game sales they would probably tack on an extra fee to maintain access to the games you already paid for. They would probably throw in some forced obsolescence to ensure you buy the new version of Half Life or any other cookie cutter game every year.

  11. I appreciate Valve and everything they do for gaming, not just games. I don’t think they have the best games, just seems like great thinkers on a low budget.

    EA would destroy Valve’s character.

    • For the record I have nothing against EA.

    • Well, you should. EA is pure evil in its most basic form.

  12. NOOOOOO!!!!!!
    THEY CAN’T!!!!!!!!

    GABE IS KING OF THE GAMING INDUSTRY!!!!!!!!!!!

  13. I like that Gabe has enough integrity and passion for what he does to not be swayed or bought. I have so much respect for that man.

  14. I think if they have the money they will do it and they dont even care there just thinking about them selves

  15. Seesh! EA is like a damn plague.

  16. Wasn’t EA voted the worst company in America this year? or did it only make it to the finals. On point, i’d imagine EA purchasing valve would have the same effect that, activision buying blizzard had. and a lot of us saw they stopped caring about the player base and decided to crap out bad content updates for the last couple of years. WoW is dying and that’s a fact and i’d blame the buyout for it. Same thing would happen to half life 3… if it ever gets released *cough* DUKE NUKEM *cough*

  17. EA better understand they turn everything they touch into s***.

    They’d buy Valve for over a billion dollars and destroy it like a kid would destroy an expensive toy.

    Remember SWTOR, EA. Remember it.

    • REMEMBER IT!!!!!!!!!!!! *FISTS IN AIR*

      Lol, sorry, couldn’t help myself… Not disagreeing with you or anything, just had to get that out after reading your comment. :-P

  18. Yeah, EA can go suck a joystick.

  19. Rather unsurprising that EA would want to grab Valve, but pleasantly surprising that there are companies out there that won’t take a billion dollar offer from the bEAst*. Valve clearly has plenty of confidence in itself, and the ambition/imagination to probably keep raking in the cash for many years to come.

    * Yeah, I went there

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