EA Not Buying Harmonix

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An interview with financial news source Bloomberg sheds light on just how dire EA's situation is following a rash of acquisitions. Here are the top three quotes from EA CEO John Riccitiello to Bloomberg.

1) "I'm sure some smart investor will buy [Harmonix] feeling that they can catch a falling knife, but more people have been cut trying to catch falling knives than have benefited from getting the timing exactly right."

What that means: EA's not looking to buy Harmonix.Why it's interesting: EA just doesn't have the money it used to and the music game craze may be on its way out. Sure, EA bought Facebook game maker Playfish for as much as $400 million and mobile game publisher Chillingo for $17 million just this year. But stocks aren't looking so hot for EA lately, and Bloomberg says overall that the stock is down 74 percent in the last three years. And as for music games, if even Guitar Hero publisher Activision is backing off on them, you know it's only a matter of time before the music stops.

2) "Zynga has a chance that 'FarmVille' will stand the test of time successfully, but it's far from clear to me that that's a certainty."

What that means: EA is maybe a little anxious about how much power Facebook has over social game life and death. Also, the company would rather have a franchise it can sell on every console and your dishwasher, not just on Facebook and iPhone.Why it's interesting: After all this time and all that money, big publishers still roll their eyes at FarmVille. Sure, it's more habit than game, but who can afford to turn a blind eye to all that potential? Certainly not EA.

3) "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."

What that means: Seriously, EA's not going to buy Harmonix. Also, Riccitiello is anxious.Why it's interesting: It shows you just how worried Riccitiello is. Think about how hard this is for him: He came back to EA in 2007 to be CEO when the company was riding high* and then stocks just plummeted. Yes, he could blame the recession -- but the stockholders are more likely to blame him. We gamers have a habit of sneering at big business heads like Riccitiello, Activision's Bobby Kotick, and Nintendo of America's Reggie Fils-Aime -- but their jobs are no cake walk. Somehow, they have to turn bad situations like these around; and if they can't, they lose their jobs.

*Scroll down to the interactive chart and click 3Y in the upper right hand corner. Scary, huh?

Source: Electronic Arts Hunts Video-Game Bargain Bin for Acquisitions [Bloomberg]

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