I just posted this comment on WSJ.com in response to the article about Disney acquiring EA.

On Sept 5, 2005 EA said in a press release, “These promotions and changes also mark the end of an era for EA, with the departures of Studio President Don Mattrick and Executive Vice President Bruce McMillan from our executive team…”

Previous to that year, EA had an ever growing stock price. Since then though, the stock’s performance might politely be described as flat.

In contrast, Activision, one of EA’s main competitors, has seen their stock continue to rise over the same period.

Whether it was truly the departure of the Mattrick/McMillan power duo or something else, clearly something changed at EA and that change has been reflected in the financial performance of the company.

The company’s market cap in the past put it out of acquisition range by other entertainment companies. Given the beating the stock price has taken, it’s a more attractive target financially, but the question of “fit” with any suitor has to be addressed.

A Disney acquisition of EA would have a complicated integration process, with significant overlap on the sales and marketing fronts, as well as possible significant cultural differences.  Part of EA’s value is it’s ability to produce games and another part is it’s ability to get those games to customers through retail.

Disney already has the ability to get products to retail so the main value in the acquisition would be EA’s licenses and its game production capacity.

Looking at EA’s game production capacity, during the growth years, it was a production machine cranking out one top selling game after another, doing especially well with IP it licensed from others or purchased through acquisition of other game studios.

Could it be that EA’s flat performance over the past few years was due to an increased focus on creating original IP instead of cranking out more licensed games?

If so, matching the EA production talent and existing licenses with Disney/Pixar entertainment powerhouse could be a big win for both groups.

It would seemingly pave the way for more games based on Disney/Pixar/ABC/ESPN properties while simultaneously offering a more simple path for EA’s key IP such at “The Sims” to migrate to film/TV and other linear media.

EA knows game production. Disney and companies knows how to reliably create new IP.

Maybe it’s time to start a new era in entertainment with the combination of the two great companies.