Evidence from the financial world suggests that Electronic Arts is gathering an "acquisitions warchest" of several billion dollars in preparation for a major spending spree later this year - with even Japanese giant Nintendo considered to be a potential target.
Earlier this week the publisher made a $2 billion shelf filing with the Securities and Exchange Commission in the USA, allowing it to make public offers of securities and raise massive reserves of cash very quickly should it choose. Details of the filing indicated that the company plans to use the cash to finance expenses such as research and development or acquisitions.
EA already has over $1.1 billion in cash on its balance sheet, giving it potential cash purchasing power of around $3.1 billion in addition to the huge share purchasing power of the company. That kind of money makes almost every company in the industry, with the obvious exceptions of Microsoft and Sony, into potential acquisition targets.
What seems most likely is that EA will go on a shopping spree later this year, bringing several smaller companies under its banner. Conjecture over which companies will be targeted could go on for months; the industry is awash with developers and smaller publishers struggling to keep afloat despite valuable stashes of intellectual property which could make them into potential buyout targets.
However, a rumour which has seemingly become popular in the Japanese markets over the past couple of days is that in fact, the warchest may be aimed at one target rather than several - namely a takeover of Nintendo, giving EA not only control of some of the most powerful franchises in the games industry, but also the chance to control its own console platform.
Yes, we're sceptical. Very sceptical in fact; but the radical rumours circulating on the markets suggest that EA could be contemplating a half-cash, half-shares bid for Nintendo - which despite its legendary independence, has been weakened recently by its own huge reserves of cash and is considered by some to be vulnerable to a takeover bid.
The Japanese market is certainly ripe for consolidation, with the recent merger of massive development studios Square and Enix considered to be only the beginning of a wave of mergers and acquisitions. The possibility of Japanese firms being bought by foreign companies is very much a real one - as is the reverse scenario - with Microsoft still thought to be considering its options in the territory. Microsoft made tentative inquiries about buying Nintendo in the early stages of its own console development program, but was rebuffed; an attempt to buy Sega later on went much further, and many believe that this could still be on the cards.
The possibility of Nintendo being an EA brand by the end of 2003 is remote - but it certainly exists. Much more likely is that several other well known names in gaming will be carrying an EA logo next Christmas, as the world's largest videogames publisher seeks to extend its empire and much of the rest of the industry seeks a rescue through consolidation.