What happened to Westwood? I went looking, with a spreadsheet

In 2000 I bought Red Alert 2, and I still play it (there is a whole page about that). What I never understood was why Command & Conquer went quiet in the years after Electronic Arts bought Westwood, the studio that made it.

In 2025 I finally went looking properly: the decisions behind EA’s results, the numbers in its annual reports, and what the company was worth. This is what I found, with a few things I got wrong at the time put right.

The pattern: buy, leave alone, absorb, close

EA paid $122.5 million in cash for Westwood in August 1998 (CNNfn, 1998). For a while nothing seemed to change: Tiberian Sun came out in 1999 and Red Alert 2 in 2000. Then in January 2003, in the same week it reported a $250 million quarterly profit, EA announced it would fold its Los Angeles, Las Vegas and Irvine studios into one studio in Los Angeles. Westwood in Las Vegas and EA Pacific in Irvine, the team behind Red Alert 2 and Generals, were closed (Goldstein, 2003).

Westwood was not the only one. Looking through EA’s purchases, the same shape keeps turning up:

• Bullfrog (Populous, Theme Park, Dungeon Keeper): bought in January 1995; its Guildford offices closed in early 2000 and the name was phased out (Maher, 2025).
• Maxis (SimCity): bought in 1997 (Snyder, 2015). The original Emeryville studio was closed in March 2015, though the Maxis name lives on at other EA studios (Futter, 2015).
• Mythic Entertainment (Dark Age of Camelot, Warhammer Online): bought in 2006 (Electronic Arts, 2006); closed in May 2014 (Futter, 2014).
• Pandemic Studios (Star Wars: Battlefront, Mercenaries): bought in October 2007 together with BioWare for $860 million (Eldon, 2007); closed in November 2009, with most of its roughly 200 staff let go (McElroy, 2009).

A studio arrives with a reputation, keeps working much as before for a few years, gets drawn into the larger company, and is then closed or merged away. From the outside you only see the dates. What happened inside each studio I can only read about, so I’d call this a pattern, not proof.

It’s also not the whole story. Some purchases failed because the market moved, not because of anything EA did. EA paid $275 million in cash for Playfish in 2009, with up to $100 million more if it hit its targets (Schonfeld, 2009). Four years later it switched off Playfish’s Facebook games, saying the players and activity had fallen away (Kubba, 2013).

“Surprise mechanics”

The other thing players complain about is how EA makes money after the sale. Ultimate Team, the card-collecting mode that became the centre of EA’s football games, started in March 2009 as a download for FIFA 09 (Electronic Arts, 2009). Its packs of cards, which you open without knowing what is inside, are what most people mean by loot boxes. EA doesn’t use that word. In 2019 its vice president of legal and government affairs told a committee of the UK Parliament: “We look at them as surprise mechanics” (Gault, 2019).

When I first wrote this up, I had EA’s microtransactions beginning with Mass Effect 3 in 2012. Ultimate Team was three years earlier.

What the numbers say

For the money side, I compared EA with Activision Blizzard over 2015 to 2022, the last year Activision reported on its own. Two things stood out.

EA got more out of what it owns. In most years it turned each dollar of assets into roughly 50 to 70 cents of revenue, against Activision’s 30 to 40, and it earned a higher return for its shareholders. But EA kept less of each sale as profit. In 2022 EA kept 11 cents of every revenue dollar as profit and Activision kept 20. That gap usually points to costs: development, running live games, or titles that don’t sell.

One year looked spectacular: in 2020 EA’s profit was 55% of its revenue. At first I put that down to COVID. It wasn’t. EA’s financial year ends on 31 March, so its 2020 year closed just as lockdowns began. The real reason is in EA’s annual report: EA moved some of its intellectual property to its Swiss subsidiary, and that one-off move brought a tax benefit of about $1.5 billion. Net income for the year was $3,039 million on revenue of $5,537 million (Electronic Arts, 2020). Take the one-off out and 2020 looks like the years around it.

What I thought EA was worth

The last part was a valuation. I started from EA’s free cash flow for the year to March 2024, $1,369 million. That year EA reported $7,562 million in revenue and $1,273 million in net income (Electronic Arts, 2024). I grew that cash flow at 8% a year for five years, 6% for the next five and 4% for the five after that, then discounted it back at 7.16%.

That rate is EA’s cost of capital, worked out from a US Treasury yield of 4.06%, EA’s beta of 0.79 (how much its shares move with the market) and an equity risk premium of 5%, the figure Kroll recommended at the time (Kroll, 2024). Kroll pairs that premium with the 20-year Treasury yield; I used the 10-year, which makes the rate a little lower and the value a little higher.

The answer was about $52.4 billion for the whole business, debt included. A second check, using what investors paid for Take-Two relative to its revenue, landed in the same place.

Six months later, on 29 September 2025, EA agreed to be bought by a consortium of Saudi Arabia’s Public Investment Fund, Silver Lake and Affinity Partners. The deal valued the company at about $55 billion: $210 a share in cash, 25% above where the shares had been trading (Electronic Arts, 2025a). It completed on 4 August 2026, and EA’s shares stopped trading (Electronic Arts, 2026).

So a spreadsheet on my own computer came within 5% of what someone actually paid. I’d like to say that was skill. Some of it was luck, and a buyer who takes a whole company pays extra for control, so the two numbers measure slightly different things. What it does suggest is that EA’s share price had been sitting below what the business was worth to someone willing to buy all of it.

Two decisions from the same years

Two more of EA’s decisions show the same habit of wanting full control of its own platform.

In May 2022 EA announced that, after almost 30 years, its football games would drop the FIFA name and become EA Sports FC (Weber, 2022). Reports at the time said FIFA wanted more than $1 billion for every four-year World Cup cycle, more than double what EA had been paying, and that the two also disagreed over whether EA could use the name beyond the games themselves (Wallace, 2021).

In February 2025 EA agreed to buy TRACAB, whose cameras track every player and the ball during real matches, to make its sports games move more like the real thing and to feed new features in the EA Sports app (Electronic Arts, 2025b).

What I take from it

EA is very good at making money from the games and studios it owns. The studios it buys have a habit of not surviving being owned, and the games I grew up on went with them.

Now that EA is privately owned, it no longer files annual reports. If the next studio it buys goes the way of Westwood, there won’t be a 10-K to read about it in.

References

CNNfn. (1998, August 17). EA buys Westwood. CNN Money. https://web.archive.org/web/20011208170050/http://money.cnn.com/1998/08/17/life/q_ea/

Eldon, E. (2007, October 11). EA buys Pandemic Studios/BioWare for $860 million. VentureBeat. https://venturebeat.com/business/ea-buys-pandemic-studiosbioware-for-860-million

Electronic Arts. (2006, June 20). EA to acquire Mythic Entertainment, studio recognized worldwide for top development talent, critically acclaimed franchises and ground-breaking online experiences [Press release]. https://s204.q4cdn.com/701424631/files/doc_news/2006/06/1/314440.pdf

Electronic Arts. (2009, February 10). EA SPORTS creates FIFA 09 Ultimate Team for record number of FIFA 09 online gamers [Press release]. Business Wire. https://s204.q4cdn.com/701424631/files/doc_news/2009/02/1/364415.pdf

Electronic Arts. (2020). Form 10-K for the fiscal year ended March 31, 2020. U.S. Securities and Exchange Commission. https://www.sec.gov/Archives/edgar/data/712515/000071251520000019/ea-20200331.htm

Electronic Arts. (2024). Form 10-K for the fiscal year ended March 31, 2024. U.S. Securities and Exchange Commission. https://www.sec.gov/Archives/edgar/data/712515/000071251524000023/ea-20240331.htm

Electronic Arts. (2025a, September 29). EA announces agreement to be acquired by PIF, Silver Lake & Affinity Partners for $55B [Press release]. https://www.ea.com/news/ea-announces-agreement-to-be-acquired

Electronic Arts. (2025b, February 3). Electronic Arts agrees to acquire TRACAB Technologies. https://www.ea.com/news/ea-sports-realism-technology

Electronic Arts. (2026, August 4). EA announces completion of acquisition by PIF, Silver Lake, and Affinity Partners [Press release]. https://www.ea.com/news/ea-announces-completion-of-acquisition

Futter, M. (2014, May 29). EA shutters Warhammer Online developer Mythic. Game Informer. https://www.gameinformer.com/b/news/archive/2014/05/29/ea-shutters-warhammer-online-developer-mythic.aspx

Futter, M. (2015, March 4). EA shuts down SimCity studio Maxis Emeryville. Game Informer. https://www.gameinformer.com/b/news/archive/2015/03/04/ea-shuts-down-simcity-studio-maxis-emeryville.aspx

Gault, M. (2019, June 20). EA says loot boxes are just ‘surprise mechanics’. Vice. https://www.vice.com/en/article/ea-says-loot-boxes-are-just-surprise-mechanics

Goldstein, M. (2003, January 29). Westwood, EAP shut down. Shacknews. https://www.shacknews.com/article/24749/westwood-eap-shut-down

Kroll. (2024, June 6). Kroll lowers its recommended U.S. equity risk premium to 5.0%, effective June 5, 2024. https://www.kroll.com/-/media/kroll-images/pdfs/kroll-lowers-its-recommended-us-equity-risk-premium-effective-june-5-2024.pdf

Kubba, S. (2013, April 15). EA retiring Playfish Facebook games. Engadget. https://www.engadget.com/2013-04-15-ea-retiring-playfish-facebook-games.html

Maher, J. (2025, August 15). Bullfrog in the dungeon. The Digital Antiquarian. https://www.filfre.net/2025/08/bullfrog-in-the-dungeon/

McElroy, J. (2009, November 17). Pandemic closes physical doors, brand lives on. Engadget. https://www.engadget.com/2009-11-17-pandemic-closes-physical-doors-brand-lives-on.html

Schonfeld, E. (2009, November 9). Not playing around. EA buys Playfish for $300 million, plus a $100 million earnout. TechCrunch. https://techcrunch.com/2009/11/09/not-playing-around-electronic-arts-buys-playfish-for-275-million/

Snyder, B. (2015, March 5). Maxis, studio behind ‘SimCity,’ ‘The Sims’ being shut down. Fortune. https://fortune.com/2015/03/05/sims-simcity-maxis-electronic-arts/

Wallace, C. (2021, October 14). FIFA wants EA to more than double its payments for their next licensing deal. MCV/DEVELOP. https://mcvuk.com/business-news/fifa-wants-ea-to-more-than-double-its-payments-for-their-next-licensing-deal/

Weber, C. (2022, May 10). Welcome to the club: EA SPORTS FC is the future of interactive football. Electronic Arts. https://www.ea.com/news/ea-sports-fc