EA Gets Massively Bigger

Showing that the biggest can in fact get bigger, Electronic Arts (Nasdaq: ERTS  ) is acquiring online video game specialist Mythic Entertainment for an undisclosed amount. Mythic started out 11 years ago as a modest creator of text-based multiplayer role-playing games before breaking out with 2001's release of Dark Age of Camelot.

Even though EA has been a perpetual buyer of smaller developers, gobbling up Mythic is a good indication of where EA aims to grow in the near-term: massively multiplayer online fantasy games.

After all, this is the same niche that has provided China with some of its more tantalizing growth stocks, like NetEase (Nasdaq: NTES  ) , The9 (Nasdaq: NCTY  ) , and Shanda Interactive (Nasdaq: SNDA  ) . You don't have to go too far to find addicts of Vivendi Universal's (NYSE: V  ) World of Warcraftcloser to home.

EA is no stranger here. The Sims Online and the war-based Battlefield series have kept the country's leading video game publisher on the Internet-based gaming radar. Moving gameplay online, with either ad-supported models or the more profitable subscriber-fee approach, is a logical direction for the industry. Leading retailers like Gamestop (NYSE: GME  ) may not like it, but margins are kinder when you can update titles directly and have constant contact with a community of gamers.

EA's timing is right. The industry is in a lull, as two of the three console makers gear up to roll out their next-generation gaming systems. Mythic is also hoping to have another hit on its hands next year, when it will release a new online game based on Games Workshop's internationally acclaimed Warhammer fantasy realm. With EA's muscle, this could be a win-win for both parties.

Imagine that -- a multiplayer game where everybody wins!

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Longtime Fool contributor Rick Munarriz loves playing video games but he doesn't own shares in any of the companies mentioned in this story. T he Fool has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.