The stock of Electronic Arts Inc (NASDAQ:EA) closed at $108.82 losing 2.49% in yesterday’s trading session. This company has made its latest announcement revealing that it intends to acquire game development studio Respawn Entertainment. This announcement was made shortly after EA expressed its intention to shut down Visceral Games, which happens to be a unit focusing on a major Star Wars title for EA.

If all moves according to plan, EA will pay $151 million in cash up front for Respawn and there will also be an addition $164 million in long-term equity for employees. A lot of people will have their eyes fixed on the performance of Respawn through 2022. Rumors have been flying around about the maximum cash consideration of about $140 million in incentives.

Visceral was shut down recently and that has raised a lot of concern among investors. A large number of them were basing their judgment upon the fact that it had been recently working on the Star Wars project.

But it is also crucial to face the fact that most of the significant game publishers usually contract a number of studios to work on a wide array of projects overtime. As a matter of fact, EA shouldn’t be viewed as being any different.

It has dedicated much of its time to working closely with Titanfall. Asides from that, it has also been working on a big-budget Star Wars game for EA, and at the moment it has support and resources from the industry giant. Its main objective is to make it big in its business undertakings.

Vince Zampella, who is the head of Respawn in a recent interview, broke down the reasons as to why Respawn was better off under EA’s umbrella.

He opined, “We see the need for bigger resources to make bigger games that are at the right level of competitiveness. EA has great knowledge for live services stuff that we are looking at and the game industry is transitioning to that.”

In using the term “live services”, Zampella was making a close reference to the in-game content users usually buy while playing the game.