Electronic Arts buys social game maker Playfish

By Franklin Paul

NEW YORK (Reuters) - Electronic Arts Inc has acquired privately held Playfish for $275 million in cash plus other consideration as the maker of the "Madden NFL" series expands in the growing social gaming sector.

EA paid about $275 million in cash for 2-year-old Playfish, which makes games for people to play on computers with friends, unlike traditional videogames that need dedicated consoles.

Playfish's hits include the game show-styled "Who Has the Biggest Brain?" and virtual pet game "Pet Society," which boasts some 21 million users a month. The games are free, but players can purchase or give away virtual goods -- such as flowers, clothes, furnishings and weapons.

The deal includes another $25 million in equity retention arrangements, and the sellers could reap another $100 million, contingent upon the achievement of certain performance milestones through 2011, London-based Playfish said.

EA said the acquisition accelerated its position in social entertainment and strengthened its focus on the transition to digital and social gaming.

"The great thing about games is people play and pay for games -- what we are seeing change is the model in which they are doing so," said EA Interactive executive Barry Cottle.

"You typically paid a significant up-front price to play a game, and now we are seeing -- with platforms like Facebook

and (Apple's) Apps store -- it's a free or near-free environment in order to get into a game," he added. "It's more now play-to-pay, instead of pay-to-play."