EA signs five-year Facebook deal

By Julianne Pepitone, staff reporter


NEW YORK (CNNMoney.com) -- Electronic Arts has signed a five-year deal to use Facebook Credits as the only accepted method of payment for its games on the social networking site.

Under the terms of the deal, EA will receive 70% of revenue from Facebook Credits and Facebook gets the other 30%. Consumers use the credits to play games and buy virtual goods within the apps.

EA's (ERTS, Fortune 500) catalog includes games from Playfish, an app maker EA bought last fall. Playfish games Pet Society and Restaurant City are two of the top 10 games on Facebook, as measured by daily active users.

"Gaming has emerged as the most popular category of applications on Facebook," said Barry Cottle, a senior vice president at EA Interactive. "The natural step is for EA to broaden its relationship with Facebook."

The deal announced Tuesday is a boon for Facebook, which has made a big push for Facebook Credits. Facebook has been trying to formalize relationships with gaming companies -- and get rid of bad blood.

For example, Zynga was reportedly threatening to pull its games off Facebook and start its own platform earlier this year.

The Credits revenue split was reportedly one of the main sticking points, but Zynga signed its own five-year deal with Facebook in September. It, like EA, will also receive 70% of revenue from Facebook Credits.

Earlier this year, Facebook made similar five-year deals with two other major social gaming companies: Playdom, which is now owned by Walt Disney (DIS, Fortune 500), and Crowdstar.

After announcing the deal, EA reported fiscal second-quarter earnings after the closing bell. The company lost $201 million, or 61 cents a share, narrowing from a loss of $1.21 a share a year earlier. Excluding one-time items, EA earned 10 cents a share. Analysts were expecting an adjusted loss of 10 cents a share.

Shares of EA ended 2.5% higher at $16.01 on Tuesday but dropped almost 2% in after-hours action. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 16,462.38 -100.92 -0.61%
Nasdaq 4,332.05 -37.72 -0.86%
S&P 500 1,919.35 -11.32 -0.59%
Treasuries 2.49 -0.06 -2.46%
Data as of 12:27pm ET
Company Price Change % Change
Bank of America Corp... 14.91 -0.34 -2.23%
Apple Inc 95.65 0.05 0.05%
Facebook Inc 71.79 -0.86 -1.18%
General Electric Co 25.16 0.01 0.02%
Ford Motor Co 16.75 -0.27 -1.59%
Data as of 12:11pm ET

Sections

Malaysia Airlines was in major trouble even before the twin disasters of Flight 370 and Flight 17 claimed the lives of 537 people. More

The U.S. economy added 209,000 jobs in July. But that's lower than the number of jobs added In June ... and it was not as strong as what economists expected. More

Terrell White has had a profit-sharing plan for his employees since 1981, believing that if the staff isn't happy, guests won't be either. More

Get paid to go on vacation, receive a couple of bonus weeks at the end of the year or take as much time as you need. Such vacation policies are more than a dream at some small, niche -- and often tech-based -- companies. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.