(Reuters) -Amazon.com Inc is not expected to bid for Electronic Arts Inc (NASDAQ:EA), CNBC said on Friday, citing sources, quashing an earlier report that the online giant would make an offer today for the videogame publisher.
EA shares jumped 15% in premarket trading after the report from USA Today on Amazon (NASDAQ:AMZN)'s takeover offer for the "FIFA" and "Apex Legends" owner. The stock was up 4% in early trading, giving the company a market valuation of over $37 billion.
Amazon and EA said they do not comment on rumors and M&A speculation.
Sitting on a cash pile of about $37 billion, Amazon has hit the acquisition trail to diversify its business beyond e-commerce and cloud under new Chief Executive Andy Jassy.
The company earlier this month offered to buy Roomba-maker iRobot (NASDAQ:IRBT) Corp for $1.7 billion, just weeks after agreeing to acquire primary care provider One Medical for $3.5 billion.
Amazon, which owns videogame live-streaming platform Twitch, has also purchased MGM studios, the maker of "Rocky" and "James Bond", movies for $8.5 billion.
EA's strong licenses, intellectual property rights and the potential to build new games in the metaverse make it an attractive option for tech giants looking to grab attention from a younger audience, analysts said.
Bets on the metaverse had also powered Microsoft Corp (NASDAQ:MSFT)'s $68.7 billion deal for EA rival and "Call of Duty" maker Activision Blizzard Inc (NASDAQ:ATVI) in January https://www.reuters.com/article/activision-m-a-microsoft-idCAKBN2JS174.
The new deals are also blurring the line between personal computer and mobile gaming companies and come against the backdrop of a struggling global gaming industry as the pandemic-fueled surge in demand ebbs.
The global gaming market is expected to grow just 2% in 2022 from a year ago, data from research firm Newzoo showed, a far cry from the 23% growth clocked in 2020.
EA has forecast lackluster adjusted sales numbers, saying it was not "completely immune" to recession.
Its shares had lost about 3% to Thursday's close, compared with a nearly 30% drop for Take-Two (NASDAQ:TTWO).