Did Electronic Arts Overpay for Glu Mobile and Codemasters?
Deal-making activity has been heating up over the last year in the video game industry. Electronic Arts (NASDAQ: EA) recently joined the game in a big way. In separate deals this year, it acquired Glu Mobile and Codemasters for a whopping $3.3 billion combined.
As a result of the deals, EA in its fourth-quarter earnings report guided for lower profits in fiscal 2022 as it integrates the two companies into its operations. It makes you wonder about the value here, especially since Glu Mobile generated a significantly lower net profit margin than EA's own business last year. Is EA throwing good money after bad with these deals?
Here's a breakdown of what these two game companies bring to EA, and what management sees happening in the long run.
Source Fool.com
