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EA buys Westwood
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August 17, 1998: 6:57 p.m. ET
Computer gaming giant to purchase competitor for $122 million
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NEW YORK (CNNfn) - Electronic Arts, the 500-pound gorilla of the computer gaming industry, gained some more weight Monday, announcing it had signed a definitive agreement to acquire Westwood Studios.
EA (ERTS) will pay Spelling Entertainment Group's (SP) Virgin Interactive unit $122.5 million in cash for Westwood and certain other studio assets. Officials at both companies expect the deal to close at the end of September. Westwood founders Brett Sperry and Louis Castle have signed five-year employment contracts with EA.
Westwood is the developer of the popular Command and Conquer line of games. The real-time strategy battle simulations have spurred innumerable clones within the video-game industry, few of which have come close to matching the line's financial or popular success.
In the first six months of 1998, Command and Conquer and its sequel Command and Conquer: Red Alert have earned the company $3.4 million, according to estimates by market research firm PC Data. This despite the fact that the titles are three and two years old, respectively, almost geriatric in gaming terms.
In November, Westwood expects to release Command and Conquer: Tiberian Sun, the latest highly anticipated entry in the series.
"We think that Command and Conquer is one of the most valuable properties in our industry," said Pat Becker, a spokesperson at Electronic Arts.
Spelling Entertainment has been looking for a buyer for Virgin Interactive for about a year, but was unwilling to split the company's assets. When it reversed that stance last week, Electronic Arts rushed to seal a deal for Westwood.
EA said it will also acquire Virgin Interactive's development studio in Irvine, Calif., as well as its 60 employees. This leaves Virgin Interactive's future somewhat uncertain.
A Virgin Interactive spokesperson declined to comment on the company's plans.
Westwood Studios, based in Las Vegas, currently has a five to six percent share of the PC game market. The company, and its 150 employees, will remain in Nevada.
"We were courted by many companies, but in the end, we knew that EA would provide us with the best infrastructure and support that we need," said Sperry, Westwood's president and CEO.
Electronic Arts, the world's largest developer of video games, controls approximately 11 percent of the PC game market. Its titles include the Wing Commander series, Madden Football and the Ultima titles. The company's stock closed up 2-5/8 Monday at 50-13/16. 
--by staff writer Chris Morris
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