In an interview with Bloomberg, Electronic Arts CEO John Riccitiello discussed something I’ve talked about as a possibility before: the possibility of purchasing for-sale Harmonix. He’s not nearly as high on it as I was.
I’m sure some smart investor will buy the business feeling that they can catch a falling knife, but more people have been cut trying to catch falling knives than have benefitted from getting the timing exactly right… We’re still out of favor. Moves that look like I’m doubling down on yesterday would make it harder still to convince investors that tomorrow is the Promised Land.
Elsewhere in the interview, Mr. Riccitiello notes his company’s current strategy: expand the company via smaller acquisitions that won’t break the bank (read: not Harmonix), and leveraging Playfish to make the company a player in the social gaming market. Purchasing a AAA console developer like Harmonix for a huge sum of money would be 180 degrees opposite of that goal.
There are two conclusions that can be drawn from this: either Mr. Riccitiello feels he doesn’t have the currency with investors that haven’t been happy with him for awhile to justify such a costly and risky acquisition, or he feels the ship on the plastic instrument rhythm genre has sailed. Either, both or none of those conclusions could be accurate – my opinion is that there’s some truth to both – but the end result is that unless this is posturing in a game of chicken with Viacom, I think we can probably put to rest the notion that EA would buy Harmonix to protect the Rock Band name.
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