Microsoft says EA purchase rumor is FALSE.

[heruamon]

CGI-Quality said:

 

Microsoft says EA purchase rumor is false

Electronic Arts stock jumped 4 percent Wednesday amid talk that Microsoft might be interested in buying the major video-game publisher.

"There's talk that Microsoft might be interested in acquiring Electronic Arts. It's unsubstantiated chatter, but it's out there," Frederic Ruffy, options strategist at WhatsTrading.com in New York, told Reuters. The news agency also reported that a London-based trader has heard similar talk in Europe.

However, Microsoft spokesman David Dennis dispelled the rumor.

"There is no truth to this rumor," he said in an e-mail to seattlepi.com, "we have no plans to purchase EA."

http://blog.seattlepi.com/microsoft/archives/180058.asp

Well there you have it, that rumor may now R.I.P.

Thoughts?

I’m sure there was some fire to this smoke of a story…especially to have analysts commenting on it.  The current market value of EA is so low, it’s very possible the rumor could  be true, but I would have to wonder how M$ would be able to untangle all the commitments of EA to produce multi-platform games.  EA sports games are some of the biggest titles annually, and they get a lot of revenue off Playstation and Nintendo…What I think is more likely a situation is that M$ might buy huge chunks of EA…such as Bioware and others, and effectively turn Electronic Arts into Electronic Sports.  Those games are HUGE money makers, and If I was trying to downsize, I would cut out things that don’t make money…and keep the high profit margin ones.  Bioware makes money, but you’d have to offer a sacrificial lamb for M$ to absorb all of your debt.