Although Electronic Arts did not disclose how much they paid to acquire prominent Melbourne based games development studio, Firemint, during their announcement yesterday, it hasn't stopped tech industry investors and analysts from estimating how much the deal was worth.
The Sydney Morning Herald has an article containing the speculations of various tech industry sources on how much EA paid for Firemint, basing their estimations on the employee size of Firemint to how much the studio was turning over annually.
Investors in the tech industry field put the sale of Firemint between $20 and $40 million, based on the knowledge that the studio had a turn over $10 million dollars in revenue per year. Another source with connections to major venture capital firms puts that ceiling much, much higher, from $25 to $100 million. From smh.com.au...
"They've got 60 people so they'd be costing at least $150,000 a head for sure. If there's 60 of them, that probably means they're spending $9 million a year at least in costs; if you assume that they're making at least $9 million a year in revenue, even just on a revenue multiple of four or five times you imagine it's somewhere between $25 and $100 million, depending on how crazy Electronic Arts were for it," the source said...
Even if you're making $5 million a year in revenue you're going to get $25 million.
During a conference call, EA executives revealed that the publisher paid less than $25 million to acquire Firemint.