“EA to Acquire Criterion Software Group …” This was the headline that greeted the CEOs of all the major software publishers as they sat down to breakfast on the morning of 29th, July 2004. At a stroke Electronic Arts had secured a valuable development resource (including the “Burnout” and “Black” game IPs) and, more importantly, taken a major step towards ensuring a smooth development transition to the next next-generation hardware platforms in the form of the next gen version of RenderWare. I am sure that the importance of managing this transition was uppermost in the mind of Electronic Arts’ Chairman and CEO Larry Probst, as the announcement was being made. The fact that a large group of his competitors would simultaneously void the contents of their bowels into their underpants on reading the announcement was just an added bonus.

So, what does this mean for the industry? Well, if you listen to the various soothing announcements, coming from both Electronic Arts and Criterion/RenderWare, it is business as usual. However, being an obscure yet at the same time, world-renowned skept… err psychic, I have looked into the future and all is not as we have been led to believe. Before I explain here are some salient points

i. Electronic Arts have bought a number of high profile development studios over the years (including Bullfrog, Maxis, Origin and Westwood Studios). They have all been rolled up, relocated and amalgamated into Electronic Arts studios.
ii. Criterion/RenderWare is not believed to be making a large amount of money (source: Gamesindustry.biz article.)
iii. When a publisher invests in a developer (even if only a minority stake) other publishers tend not to work with that developer again.
iv. Electronic Arts are a very focused company – focused on making as much money as possible from the sale of software.
v. Electronic Arts aren’t in the business of assisting the competition.

Taking the above factors into account I believe that proceedings will unfold as follows. Within a year Criterion Studios will be rolled up, relocated and amalgamated into Electronic Arts’ studios. If Electronic Arts didn’t want to keep the truly massive labels such as Westwood Studios alive there is no reason why Criterion will survive. On the RenderWare front the number of titles being developed using RW will start to decline as some publishers decide it is better to go with an independent supplier, rather than one owned by a major competitor. They wont want their business damaged as a result of a sudden announcement that RW will cease licensing. As for the fate of RenderWare (the company) I believe that shortly after the roll out of RenderWare 4 and the launch of the next gen platforms RenderWare will either be re-badged as Electronic Arts technologies (and cease licensing) or will be the subject of an MBO. Electronic Arts have no reason to maintain a division that aids the competition but does not generate substantial revenue.