After years of working together on Titanfall, EA announced it has acquired Respawn Entertainment, the creators of Titanfall.
Previously only a EA Partner with Titanfall, Respawn was founded by Jason West and Vince Zampella, two of original creators of the Call of Duty series. The two were fired by Activision after the release of Call of Duty: Modern Warfare 2, and after founding Respawn Entertainment signed a publishing deal with EA for the Xbox One launch title Titanfall. They followed it up with Titanfall 2 in 2016, a critical darling that didn’t meet sales expectations, most likely because it released directly between the launches of Call of Duty: Infinite Warfare and Battlefield 1.
During their most recent earnings call, EA reminded investors that Titanfall 2 sold below expectations, but “still sold very well,” according to CFO Blake Jorgunsen. It is possible EA had been preparing investors for news of the acquisition. Respawn is currently making a Star Wars title, the next entry in the Titanfall series, and a VR title.
EA summarized the details of the acquisition:
Under the agreement, EA will pay $151 million in cash, and up to $164 million in long-term equity in the form of restricted stock units to employees, which will vest over four years. In addition, EA may be required to pay additional variable cash consideration that is contingent upon achievement of certain performance milestones, relating to the development of future titles, through the end of calendar 2022. The additional consideration is limited to a maximum of $140 million.
Sources tell us that the studio is divided about the acquisition, with many people not happy about being under a large publisher again. Separate sources have also told us that founder Vince Zampella plans to stay.
Knowing EA’s reputation for severely compromising or closing studios after acquisitions, it is easy to be scared of what this means for the future of the studio. Hopefully everything works out for the best.