Electronic Arts (EA) will pay America Online (AOL) $US81 million to become the exclusive provider of games and related entertainment content to a potential audience of millions who access games through AOL and its subsidiaries, the companies announced last week.
Under the terms of the agreement, EA will provide games and other entertainment to an estimated 19 million AOL subscribers worldwide.
In addition, the five-year deal gives EA the right to provide content through AOL's Web site (www.aol.com), which is visited by an estimated 28 million people monthly, and the game channels at AOL's CompuServe, Netcenter, ICQ and Digital City subsidiaries, said Mark Blecher, vice president of marketing and electronic commerce at EA.
The California-based company is the owner of computer games including Sim City, Command and Conquer and Need for Speed.
The agreement calls for AOL and EA to relaunch their games offerings simultaneously next year, giving users multiple Web sites where they can reach the same content, Blecher said.
"Right now what [AOL users] get is a variety of games from a number of different games manufacturers," Blecher said. "What will happen following this deal is everything there will be provided by EA."
In addition to EA games, the sites will feature games created by Kesmai and WorldPlay, both of which EA said last week it intends to buy. Kesmai, owned by News Corp, and WorldPlay, a division of AOL, produce a large number of games currently available on AOL's sites, Blecher said. Kesmai specialises in multi-player games delivered directly to consumers over the Internet. Its most popular titles are Air Warrior, Aliens Online, Starship Troopers and Multiplayer Battletech.
Details of the two acquisitions were not released today, but if approved by regulators will follow the addition of two other companies - PlayNation, a San Diego-based company bought in September, and Bottle Rocket, a New York-based company bought last month - to the EA portfolio.
"We think [the venture with AOL] is going to lead to a very broad-based consumer product," Blecher said. "We are trying to build games for anyone who likes to play games." That includes everything from sophisticated interactive games for dedicated players to sports trivia games, he said.
EA plans to make money on the venture by charging subscriptions to some games, the model it currently uses for its popular Ultima game, which has 135,000 subscribers paying $10 a month.