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EA buys Titanfall studio Respawn

Deal could be worth around $450m if the developer hits performance incentives

After partnering with Respawn on multiple projects in recent years (the Titanfall franchise, a game set in the Star Wars universe and a VR title), Electronic Arts has now decided to purchase the studio outright. The acquisition could ultimately cost around $450 million, if Respawn is able to hit certain performance milestones.

Specifically, the agreement stipulates that EA will pay $151 million in cash, and then up to $164 million in long-term equity in the form of restricted stock units to employees - those will vest over four years. The performance consideration is limited to a maxiumum of $140 million, and will be tied to the development of future titles through the end of calendar 2022. EA said that the transaction should close by the end of the calendar 2017 or soon thereafter; it's also expected to be neutral to EA's net income in fiscal years 2018 and 2019.

"We've seen firsthand the world-class caliber of Respawn as a development studio with incredible vision, deep talent and an inspiring creative mindset," said Andrew Wilson, CEO of Electronic Arts. "Our longtime partnership is grounded in a shared desire to push the boundaries and deliver extraordinary and innovative new experiences for players around the world. Together, we've brought this to life in the Titanfall franchise, and now with the Respawn team joining EA, we have exciting plans to accomplish even more amazing things in the future."

"We started Respawn with the goal to create a studio with some of the best talent in the industry, and to be a top developer of innovative games," said Vince Zampella, CEO of Respawn Entertainment. "We felt that now was the time to join an industry leader that brings the resources and support we need for long term success, while still keeping our culture and creative freedom. EA has been a great partner over the years with Titanfall and Titanfall 2, and we're excited to combine our strengths. This is a great next step for Respawn, EA, and our players."

Titanfall 2 sold well but not as well as EA and Respawn would have liked, Zampella acknowledged back in August. The game had been sandwiched between higher-profile shooters Battlefield 1 and Call of Duty: Infinite Warfare, and Zampella said it was priced aggressively. For its part, EA remains committed to the franchise, stressing that Titanfall 1 and 2 were "two of the most highly-rated shooter titles in the last five years."

The Respawn acquisition is also notable since it closely follows the closure of Visceral Games, which had been working on another major Star Wars game led by Amy Hennig. EA dismissed the idea that the Visceral situation stemmed from the need to have more live service titles instead of single-player efforts.

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