Codemasters, one of the oldest and most successful video game development companies in the world, is for sale. The company that was founded by two brothers working from their bedrooms in England in 1986 has – more or less – remained in the same hands and stayed independent for more than thirty years, but everything comes to an end. As is so often the case with these things, they got an offer they couldn’t refuse, and they decided to accept it. That offer came from Take-Two and was worth around $994m.
The company shocked a lot of people when they accepted the offer in late November 2023. The business isn’t in financial jeopardy and was still growing and expanding as recently as twelve months earlier when it acquired Slightly Mad Studios for $30m. They’d also only just signed an exclusive deal that would allow them to make “World Rally Championship” games for the next five years, which is a franchise that would have provided them with a steady, guaranteed income in the future. Nevertheless, the Take-Two offer was deemed as too good to turn down and would have seen Codemasters continue as a trading style under the “2K” side of Take-Two’s business operations. It appears that won’t be happening now.
By accepting the offer, Codemasters told the world that they were for sale, and that attracted interest from elsewhere. Just at the point where it appeared that Take-Two was about to get the all-important signatures on the necessary paperwork, gaming giant Electronic Arts swept in with an even bigger offer. This new offer broke through the one billion dollar barrier and is understood to be worth around $1.2bn overall. Electronic Arts now appear to be holding all the chips and have gone on record as saying they expect the deal to be closed by the end of the first quarter of 2023. This is the same time frame that had previously been quoted by Take-Two, who must surely be wondering what happened to the deal they thought they’d secured.
With a company as large as Electronic Arts at the negotiating table, the idea of anyone else making an offer might seem redundant. Take-Two could come back with an improved bid – and it’s still possible that they might – but it’s likely that EA will up their bid if anyone tries to compete with them. They have enormous resources to draw upon and could be rivaled by very few other companies in the market. Epic Games might be able to outbid them if they wanted to, and it’s possible that Rockstar Games might be capable of it too, but so far, there hasn’t been any suggestion that they’re interested. That might not mean anything, though – there had been no suggestion that Electronic Arts were interested before they stepped forward with their enormous offer.
Given the fact that both Take-Two and Electronic Arts are both gigantic, successful companies already, some people may wonder what they stand to gain by acquiring Codemasters. The answer is a simple one – games. No matter how much someone is making, it’s always possible to make more with some sensible investments. We need only look to online slots websites and the industry they operate within for evidence of that. Gambling is a multi-billion dollar industry, and the best online slots websites rake in millions of dollars in revenue. Despite that, you’ll also find the best ones like Rose Slots keep adding new online slots to their library every week or every month to stay ahead of the competition. That’s because they know the house always wins. No matter how much money one individual player might win while playing slots, the website itself always makes more money overall. That’s the joy of owning a casino. The more games that Take-Two, Electronic Arts, or any other company owns – regardless of whether they’re games from the past or games from the present – they present an opportunity to make money.
When it comes to Codemasters, the games we’re talking about are some of the best, most-played and most-loved in the history of video gaming. The company specializes in racing games and has exclusive rights to make official Formula 1 racing games for consoles (winning awards for doing so as recently as last year), but to dismiss them as niche racing specialists would be inaccurate. Codemasters is also responsible for the “Operation Flashpoint” games, the classic “Dizzy” series, “Overlord,” and “Second Sight.” It’s in racing – and especially forms of racing that are popular in their home country, that they’ve made their name, though. Aside from the aforementioned Formula 1 and “World Rally Championship” games, they’re also responsible for “Colin McRae Rally,” TOCA Touring Cars,” Dirt,” “Grid,” and “Fuel.” Those of you who are a little older might even remember the old 16-Bit “Micro Machines” games, which were also made by Codemasters. That library of great games – along with the licenses to make new versions of their ongoing franchises – would be considered attractive by any investor.
While it seems like EA has the deal done right now, Take-Two would have been just as confident two weeks ago. Assuming the deal goes ahead in its current form, though, it’s understood that the core group of programmers who work for Codemasters will stay with the company in its new forms, and continue to develop the successful franchises they’ve been working on for several years. It’s also believed that the iconic (and trusted) Codemasters logo will continue to appear on games made by the dedicated team. To customers it will, in the short term at least, appear that nothing has changed at all. In reality, though, one of the last great independent companies has finally decided it’s time to sell up.
It’s probable that we’ll never see a small independent game studio break out in the way that Codemasters did ever again. The demands of modern blockbuster games are too extreme for a few people working alone in their spare time to come up with them, and even if they did, they wouldn’t have access to any means of distribution to sell their wares. That might still be possible with mobile games, but for consoles, it’s a thing of the past. Codemasters might have been the last of a dying breed – but at least they managed to attract a price that’s worth their years of experience and success, and the games they make today will continue to be made next year and beyond.