Riccitiello: EA avoiding big acquisitions as "we're still out of favour"
Claims buying Harmonix would be like "catching falling knives"
EA boss John Riccitiello has claimed the publisher is not currently seeking further large acquisitions, admitting that investors' faith has been shaken by its tumbling share price.
The CEO claimed to be focusing the company on boosting digital revenues - from online, mobile and Facebook - to $750 million. "I need to finish engineering and building to make that happen," he told Bloomberg. "I don't need a billion-dollar acquisition."
However, he was considering smaller deals. " There are probably 25 companies on our radar that would make sense for us at somewhere between 5 and 10 percent of the asking price."
EA has seen its stock collapse by 74 per cent since 2007, and over the course of this year the value dropped by 15 per cent. High profile and expensive purchases such as Playfish and Chillingo have likely contributed to this, as apparently did the critical and commercial performance of Call of Duty rival Medal of Honor.
When quizzed as to whether the publisher was interested in buying Harmonix following Viacom's decision to rid itself of the Rock Band studio, Ricitiello admitted that "We're still out of favour. Moves that look like I'm doubling down on yesterday would make it harder still to convince investors that tomorrow is the Promised Land."
As well as a potential negative shareholder response, Riccitiello hinted that Harmonix could be something of a poisoned chalice. "I'm sure some smart investor will buy the business feeling that they can catch a falling knife, but more people have been cut trying to catch falling knives than have benefitted from getting the timing exactly right."
Riccitiello remained positive that EA, at least, would have another day in the sun, thanks to its digital investments. "There is going to be a time when perception catches up with the facts."
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