"Games are moving from physical products to digital services," Segerstrale said, echoing past statements from EA CEO John Riccitiello, who is intent on guiding EA into the age of digitally distributed video games. Like with a flesh-and-blood version, owners have the option of buying an endless amount of stuff for their creatures. It lets people design and care for a virtual pet.
Its most popular game, "Pet Society," has 21 million monthly players.
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Playfish makes money by selling virtual items for its free games, which currently have 60 million monthly players. Kristian Segerstrale, Playfish's co-founder and CEO, called social gaming "a massive addressable market." The games run on the assumption that people want to play the addictive, easy-to-learn games with their friends - and that they are willing to pay small amounts of money for digital add-ons in those games. Playfish, a two-year-old startup based in London, will run as a standalone business within EA Interactive, which is also home to online gaming platform and EA Mobile, which publishes such games as "Rock Band" and "Tetris" for the iPhone. In all, 22 of the top 25 applications people use on Facebook are games, said Barry Cottle, senior vice president and general manager of EA Interactive. This is about a third of the site's total active users. Games are a popular pastime on Facebook, with the top 10 games attracting more than 100 million active users, according to Facebook Platform Manager Gareth Davis.
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In addition to the upfront cash payment, EA said Monday it will pay an additional cash sum up to $100 million contingent on Playfish hitting certain financial targets though December 2011, plus $25 million in equity-based retention agreements with employees. Just last week, the company launched a version of "Spore," a game that lets players create an evolving universe, on Facebook. The purchase will help EA move into gaming in online communities at a time when declining consumer confidence is cutting into traditional packaged video game sales. With the acquisition, EA is diving further into the lucrative world of social online games, which tens of millions of people play on Facebook, MySpace, the iPhone and other platforms.
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