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Megaton Shocker: EA buys PopCap for $750 million

Tuesday, 12 July 2011 21:16 GMT By Staff

The biggest mushroom cloud we’ve seen for a long time: EA’s announced that it’s to buy Plants vs Zombies and Peggle creator PopCap for $750 million.

PopCap – A History

Founded in 2000 by John Vechey, Brian Fiete and Jason Kapalka.

First release was Bejeweled, which went on to win 25 industry awards.

Acquired Sprout Games and its Feeding Frenzy license in 2005.

PopCap International opened Dublin offices in 2006; PopCap games released on Steam.

Acquired SpinTop Games and Retro64 in 2007.

Revenue for 2010 came in at $100.

July 12, acquisition by EA Games announced.

An expensive, but lucrative purchase

The acquisition will cost $650 million cash and $100 million in stock.

EA CEO, John Riccitiello said in terms of digital, the firm pulled in $100 million in revenue during in calendar year 2010, 80 percent of which was in digital sales. Riccitiello said he feels PopCap was a great standalone business on its own without EA, so if it works already “don’t break it.”

“EA and PopCap are a compelling combination,” said Riccitiello. “PopCap has shown accelerated growth in both the social and causal markets.

“PopCap’s great studio talent and powerful IP add to EA’s momentum and accelerate our drive towards a $1 billion digital business. EA’s global studio and publishing network will help PopCap rapidly expand their business to more digital devices, more countries, and more channels.”

Riccitiello said since PopCap currently has around 450 personnel, most of the firm’s designers are stuck working on individual format carriers such as Andorid, and doing unproductive work for designers. EA has personnel who can do all the localization work, so “creators can create,” instead of being stuck doing menial work.

“By working with EA, we’ll scale our games and services to deliver more social, mobile, casual fun to an even bigger, global audience,” added PopCap CEO, David Roberts.

PopCap games coming to new platforms and markets

As part of the deal, EA will be bringing Plants vs. Zombies, Bejeweled and Zuma to “new platforms and markets,” although no details have been given as yet. Riccitiello said the firm has not “put a lot of thought into the Origin end” of the deal, but did say he is pleased with the firm’s ability to make use of bandwidth options, which is something EA has been “trying to figure out,” since it started in the social and causal market.

EA’s reaffirmed its Non-GAAP guidance for Q1 FY12 and full-year FY12 despite the buyout. Also, because PopCap was its own entity, “It will continue to have accelerated margin operation growth before EA factors into its financials.”

During an investor call following the announcement of the deal, EA was asked if it could hand out a product pipeline for PopCap, but it refused, saying it tends to not hand out dates for online games for competitive reasons.

Rumours of the deal has been circulating for weeks, with reports suggesting that a buyout would cost as much as $1 billion.

Shares in EA fell 3.4 percent to $23.35 a share after the announcement. The regular session for today’s shares were down 0.9 percent before the announcement it would purchase PopCap.

The major players speak out

EA has published in full an internal memo to employees discussing the acquisition.

Riccitiello revealed that PopCap had “received a lot of offers” but chose EA in “recognition of [its] culture” of “respect” for “games and the teams that create them”.

“There is no denying that what we announced today was a business transaction,” he said. “The deal is compelling.

“Above all, we both put the quality of our games first.”

“Beyond the business rationale, and the strategic rationale, I believe PopCap and EA share very, very similar cultural values. Above all, we both put the quality of our games first.”

Riccitello urged employees to make contact with and get to know their new colleagues.

“They are an incredibly talented group of people – but you already know that from playing their games,” he said.

“Where some companies are built on a single hit, PopCap has made lightning strike again and again. They have built a powerhouse of evergreen casual properties and proven their ability to create new hits again and again on the fastest growing platforms”.

“I think there will be changes in terms of expanding our reach,” PopCap’s Garth Chouteau told Kotaku of the possibility of PopCap’s transformation.

“We can work with a team at EA to do ports more quickly, more effectively. We have fairly modest development resources and there are ways that EA can bring some of its very substantial resources to bear.”

Chouteau stressed that EA has not imposed any schedule on PopCap, and said that the developer’s lengthy periods between new releases are due to limited porting resources rather than lack of ideas.

“We’re about as slow as it gets. I don’t think that changes materially. We devote a fraction of our overall development resources to new IP. We have more resources devoted to taking existing IP and bringing it to new platforms. I think that’s going to continue as-is.

“It’s all good, he concluded. “If anything, certain aspects of the way we do business just get easier and get bigger.”

PopCap also sent a cute letter of welcome to its new overlord; view in full below.

[Original story by Johnny Cullen, contributions by Stephany Nunneley and Brenna Hillier]

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34 Comments

  1. Stephany Nunneley

    Jesus. I think every single one of us is in the wrong business. :D

    #1 4 years ago
  2. DSB

    I guess it’s the time of year where EA throws money at every social developer under the sun.

    #2 4 years ago
  3. Patrick Garratt

    “Fuck me.”

    #3 4 years ago
  4. Dean

    > “The accusation will cost $650 million”

    *acquisition*

    #4 4 years ago
  5. Grimrita

    EA want to be number #1 on every platform and since they cant create their own talent, they have to buy it, then decimate it. They are the Borg of the gaming industry

    #5 4 years ago
  6. AHA-Lambda

    fuc…king…helll!!! =O

    GIGGAA-TTTTOOON!!!!

    srsly, didn’t see this one coming a mile off O_O

    PS: better go buy some popcap games from steam quick before they disappear ;P

    #6 4 years ago
  7. Erthazus

    Jesus Christ. Thats too much.

    Pop Cap should have stayed independent.

    #7 4 years ago
  8. deathgaze

    * Price inflated to adjust for 2011 Internet financial bubble.

    #8 4 years ago
  9. Fin

    NOM NOM NOM NOM

    I like EA, so I’m not bothered by this – I am a bit concerned the games might be taken off Steam though, hmmmmm.

    #9 4 years ago
  10. Erthazus

    but whats the point if their revenue is only 100$+ million a year?

    I doubt that they can do better then that.

    #10 4 years ago
  11. Johnny Cullen

    Properly went :O. That’s a genuine megaton.

    #11 4 years ago
  12. jacobvandy

    How is this a surprise? There was a rumor weeks ago that this was going on, you guys may have even posted about it then. I forget who “debunked” it, saying it wasn’t EA who was buying, but turns out they were wrong.

    #12 4 years ago
  13. Patrick Garratt

    @10 – 7.5x revenue is a decent deal for both sides, I reckon. I assume PopCap’s very profitable, so it seems sensible. It just seems like a massive amount of money for EA at the moment.

    I’m glad I said publicly about 10 times this was all complete horseshit.

    #13 4 years ago
  14. deathgaze

    @10 and 13: The point is that Pop-Cap has a sustainable and profitable business model. Even EA admits that revenue in the game-space can be unpredictable. Buying Pop-Cap helps further round out EA’s financials as well as their market portfolio.

    I would classify this as a “good move”.

    #14 4 years ago
  15. Patrick Garratt

    @14 – *nods*

    #15 4 years ago
  16. loki

    Another proof: EA’s direction -idiots

    #16 4 years ago
  17. DSB

    It is really crazy though.

    After the Playfish fiasco, betting half a years revenue on another social project? Granted, they got the best of the best with this one, but I’m surprised that Popcap went for it as well.

    Then again I have no idea how much money 750 million is, and if you’ve built an empire on little games that a handful of guys can put together, then that has to be somewhat satisfying.

    #17 4 years ago
  18. Prof.Dr.Moertel

    geeez, that´s a whole lot of money. If PopCap can keep or even increase their revenue over the next 10 years or so, it´s a great deal. But otherwise it´s a complete disaster for EA. But since I don´t see any sign of decreasing business for those kind of games, it seems to be a fucking amazing deal.

    #18 4 years ago
  19. darksied

    @5
    … EA is a publisher. They don’t have “talent,” like you say. They go “buy” the talent in the form of developers, yes. This, I believe, is what all publishers do. And if you really want to talk about the Borg, I think you’re looking at the wrong company. EA buys and expands into different types of stuff; Activision buys, uses, destroys and moves on.

    #19 4 years ago
  20. darksied

    I can’t even think about that number … if you think about how much you make a year, and think about how long you’re going to work … wow. It’s amazing how much money people can throw around.

    #20 4 years ago
  21. The_Red

    Wow… seriously, wow. I really hope this isn’t the end of fun games like PvZ and Peggle. They may be casual or small but they are really well made. In an age where quality of most the casual games is on par with garbage (xxxxVille), their titles were like water in desert.

    #21 4 years ago
  22. Stephany Nunneley

    Okay. Added a few extra bits from the call in there. Nothing major was announced like dates, games, or whether anyone will get laid off.

    #22 4 years ago
  23. DSB

    @19 You’re not serious are you? Do you have any idea how many people they fired from Playfish? And how do you think Pandemic feel?

    EA has always gone through the motions of massive investments, followed by huge cuts as soon as they realize that they’ve overextended themselves. Last time they fired almost 20% of the company.

    People are just statistics to any business of that size, including the ones who buy their games. Whether they do good or evil is of no consequence, they do whatever they can to make money.

    #23 4 years ago
  24. Erthazus

    New game is announced!!!!

    http://cache.gawker.com/assets/images/comment/9/2011/07/93fe85dba8c3e88df0f6647835bacbdc/original.jpg

    first Screenshot.

    #24 4 years ago
  25. Johnny Cullen

    Pegglefield and Plants vs Zombies vs Mass Effect all due in a year. Calling it.

    #25 4 years ago
  26. Erthazus

    @25, Need For Weeds

    #26 4 years ago
  27. Fin

    @25

    I would buy those games.

    #27 4 years ago
  28. NeoSquall

    @19 Well duh, the Borgs capture and assimilate the best features of their preys in the collective, so considering EA the Borgs of the gaming industry isn’t entirely wrong…

    #28 4 years ago
  29. hitnrun

    No more Peggle/WoW crossovers, I guess.

    OTOH, Yoda confirmed as Peggle Master character in Old Republic Peggle.

    #29 4 years ago
  30. TheWulf

    @25

    Pfft. my money’s on Boo™: Miniature Giant Space Hamster – Caretaker.

    #30 4 years ago
  31. NightCrawler1970

    I don’t get it, EA SHUT DOWN 17, what they called aged servers, but wasting $750 Million dollars for buying “pop-cap” JESUS what a waste…

    #31 4 years ago
  32. Maximum Payne

    @31 IF they had added little bit more money they could bought yahoo :)

    #32 4 years ago
  33. MrBambinoDent

    I think this is a nice move on EA’s side and it may help pop-cap seriously expand their business.
    I’m glad about this piece of news : )

    #33 4 years ago
  34. NightCrawler1970

    @32, why need EA Yahoo???? doesn’t make sence…
    @33, Easy for you to say, not your money 750 Million wooooh, where i come from that’s a lot of money….

    #34 4 years ago

Comments are now closed on this article.

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    Logitech will no longer produce “low-end” mice, citing a decline in PC accessories. This story has been updated to include a clarification. According to a Reuters report, per MCV, the firm will instead focus on video accessories and streaming music, as its wireless Bluetooth speakers are now its best-selling product rage. This will help offset […]

  • Win! We have 1,000 Heroes of the Storm beta keys to give away

    Must have more MOBA? Win one of our 1,000 Heroes of the Storm beta keys and see if you’re more Blizzard than LoL. Can’t wait for June 2? Of course you can’t. We have 1,000 closed beta keys for Heroes of the Storm to give away this week, allowing you access before Blizzard’s MOBA goes […]

  • Xenoblade Chronicles X Nintendo Direct airs tomorrow, April 24

    A Nintendo Direct devoted entirely to Xenoblade Chronicles X will air this Friday, April 24. The video showcase will start at 11am PDT/2pm EDT/7pm UK. After the showcase, a new Nintendo Treehouse: Live presentation featuring the game will air. This is the second Xenoblace Chronicles X Nintendo Direct, but the first in English. The first […]

  • Blizzard will have 500 game stations set up at gamescom 2015

    Blizzard is heading to gamescom 2015 in August and it will have 500 game stations set up for attendees to get their hands on five of its titles. The developer will be set up in Hall 7 and those who stop by will be able to get hands-on with the latest content for Heroes of […]

  • PS4 price cut to £299 in UK

    Sony has dropped the price of the PS4 in the UK. For a limited time only, you can grab the console for £299.99 from Argos, Game, Tesco and Very. Go to Amazon.co.uk and you’ll get it for £289. You’ve only got until April 28, then it goes back up to £349. Go, go, go. For […]

  • Mad Max: first ever gameplay footage revealed

    Today, we get to finally take our first look at gameplay from Mad Max. Avalanche and Warner Bros. have shown off the first gameplay trailer for Mad Max today. The trailer below offers a look at melee combat, car combat, customisation and much more. Give it a watch below: There are a few new screenshots […]

  • Overlord: Fellowship of Evil has four-player co-op like we figured

    Codemasters has pulled the veil back on the next Overlord game, and its a four-player co-op game called Overlord: Fellowship of Evil. Rhianna Pratchett is back to write the story. The game may be co-op at its core, but it can still be played single-player. Each of the four playable character have strengths and weaknesses, […]

  • Update now available for Pokemon Omega Ruby and Alpha Sapphire, Pokemon X and Y

    Pokemon Omega Ruby and Alpha Sapphire along with Pokemon X and Y are being updated by Nintendo to fix a few bugs and in-game text. There’s also the possibility of a few hacks and exploits being fixed. Per Nintendo Life (via Serebii), both patches are 250-270 blocks in size, and it’s a mandatory update which […]

  • Side-scrolling cover shooter Not a Hero gets a demo

    Not a Hero, the upcoming game from OlliOlli developer Roll7, has received a demo. The demo for Not a Hero was made available today on Steam. In the game, you play as Steve, the campaign manager for BunnyLord. A time-travelling rabbit who’s running for mayor of London. Think this is an absurd premise? This trailer […]

  • You have until April 30 to export your Green Day: Rock Band tracks to Rock Band 3

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  • Batman: Arkham Knight minimum, recommended, and ultra PC specs revealed

    Batman: Arkham Knight is looking like it’s going to be quite a taxing game. Nvidia has released a list of the minimum, recommended, and ultra PC requirements for Batman: Arkham Knight. Here’s the full thing: Minimum OS: Win 7 SP1, Win 8.1 (64-bit Operating System Required) Processor: Intel Core i5-750, 2.67 GHz | AMD Phenom […]

  • Bloodborne patch 1.03 is live, reduces loading times, fixes suspend/resume bugs, more

    Patch 1.03 is now live for Bloodborne. The patch reduces loading times, adds item descriptions to loading screens, and fixes other various bugs. From Software has pushed update 1.03 live to all Bloodborne owners. As promised, it reduces loading times by approximately 5 to 15 seconds. Another new addition is showing item descriptions instead of […]

  • Battlefield 4: first look at Community Map in action

    Get your first look at the map designed by the community of Battlefield 4. Battlefield 4′s community-designed map is a reality. DICE has recently updated CTE to include an early version of the map. It’s not fully textured as Westie is about to show you, but the layout is nearly finalised. Westie goes over the […]

  • Microsoft apologises for uploading misleading Witcher 3: Wild Hunt footage

    Xbox’s YouTube channel uploaded a video of The Witcher 3: Wild Hunt yesterday that was captured from the PC build. The most recent gameplay video for the The Witcher 3: Wild Hunt appeared on the Xbox YouTube channel and showed a quest from the game’s opening section. A few minutes after it had gone live, […]

  • Assassin’s Creed creator’s new game is Ancestors: The Humankind Odyssey

    Ancestors: The Humankind Odyssey is the game Assassin’s Creed creator Patrice Desilets has been working on. Patrice Desilets has just announced that the next game his indie studio Panache Digital Games is making is called Ancestors: The Humankind Odyssey. The announcement comes from Desilets’s keynote at the Reboot Develop event in Croatia. The trailer started […]

  • Bloodborne: Cathedral Ward closed door mystery solved

    The mystery of the locked door at the bottom of the Cathedral Ward in Bloodborne has been solved. Bloodborne, like earlier From Software games, is filled with doors that don’t open the first time you try them. Some will give you “locked” messages, others “does not open from this side”. Some of these will open […]

  • Assassin’s Creed creator Patrice Desilets is revealing his next game now [UPDATE: ended]

    Patrice Desilets, one of the original creators of Assassin’s Creed is hosting a presentation where he’s expected to talk about his next project. Patrice Desilets has emerged once again. This time he’s attending development conference in Croatia. Desilets is giving a live keynote and there’s a good chance we’re going to hear about his next […]

  • Destiny House of Wolves: everything you need to know about gear upgrades & The Reef

    Bungie revealed plenty of important details in last night’s Destiny stream. Let’s go over everything. Alex wants to make sure you don’t miss any of the information revealed yesterday. Most of it affects all Destiny players too, even those who don’t intend on buying House of Wolves. During the first stream, Bungie explained the armour […]

  • Mod-friendly Galactic Civilizations 3 will leave Steam Early Access in May

    Galactic Civilizations 3 will leave Steam Early Access next month for a full release, Stardok has announced. The developer called the game the “largest and most diverse strategy sandbox to date,” as players have a variety of tools such as diplomatic treaties to resource exchanges, and United Planets resolutions to hundreds of research directions for […]

  • Ys 6: The Ark of Napishtim is out next week on PC – here’s the pre-order trailer

    Ys 6: The Ark of Napishtim will be released next week on PC, and today, we have a pre-order trailer for you. The game will be made available on April 28 for $19.99/€17.99/£13.99 on GOG, the Humble Store and Steam. Along with improvements over the original PSP version, it will contain less backtracking, controller support […]

  • Destiny: House of Wolves – full gear set up to level 34 in PvP and PvE, upgrades, more

    The Destiny: House of Wolves livestream this afternoon was chock full of information. Read onward for our full report. According to Bungie, Petra Venj, who serves the Queen, is the main story agent who leads the player through the main series of quests. Players who complete bounties will be able to level up in her […]

  • Destiny: House of Wolves – watch the livestream right here

    Bungie will host a Destiny: House of Wolves livestream at 2pm EDT today, and you can watch it right here. Watch live video from Bungie on www.twitch.tv The stream will introduce the new social space, The Reef, as well as gear upgrade paths. House of Wolves contains new Strike missions, The Prison of Elders three-player […]

  • FIFA Ultimate Team: week of April 22 team includes Barcelona, Chelsea players

    This week’s FIFA 15 Team of the Week is now available for FIFA Ultimate Team players. Each team member, as with previous weeks, is selected base on the previous weekend’s matches. Here’s the list of players now available: Starting GK: Claudio Bravo – FC Barcelona (Spain) CB: Leonardo Bonucci – Juventus (Italy) CB: Ömer Toprak […]

  • Sony’s Spring Fever Sale winds down with Shovel Knight and Call of Duty discounts

    It’s the final week of Sony’s Spring Fever Sale which means more games have been added to the mix. Shovel Knight, which launches today is one offer, and the rest are all Cal of Duty titles. The Taken movie series is on sale as well. With Shovel Knight available today on PlayStation 3, PS4 and […]

  • Drivers for Xbox controllers, voice messages, more features available in Xbox One preview

    Microsoft has announced new features coming to Xbox One and the Xbox App on Windows 10 through the preview program this month. Some of the new features have been requested by the community for both Xbox One and Xbox One SmartGlass. Here’s what to expect, straight from the horse’s mouth: Xbox on Windows 10 Game […]

  • Total War: Warhammer has been announced for PC, Mac, SteamOS

    Total War: Warhammer has been announced after previous teases from The Creative Assembly touched upon it. The game will contain “gigantic monsters, flying creatures, legendary heroes and storms of magical power.” It is also the first in a trilogy which includes two additional standalone titles and extra content packs. It will feature thousands of warriors […]

  • This video for The Witcher 3: Wild Hunt features a quest from the prologue

    A new video for The Witcher 3: Wild Hunt has been released, showing off the Precious Cargo quest contained in the game’s prologue. The quest tasks Geralt with helping a merchant retrieve a mysterious box from the swamps. The scene looks familiar, but we’ve seen so many videos for the game it’s hard to tell […]

  • Limited public beta for The Elder Scrolls Online kicks off tomorrow on consoles

    The limited public beta for The Elder Scrolls Online: Tamriel Unlimited will launch on PlayStation 4 and Xbox One tomorrow, and Sony has provided details on the tester for those who’ve been invited to participate. The beta test contains the full version of the game and will run from April 23-27, and will start and […]

  • Dying Light debuts in second place on Media Create charts

    Techland’s Dying Light made its debut in Japan lats week, coming in a respectable second place behind Nintendo’s Girls Mode 3: Kirakira Code. The zombie shooter sold 25,530 units on PlayStation 4, while the top earner for the week moved a little over 55,000 units on 3DS. Another western release when landed on the chart, […]

  • Lord of Magna: Maiden Heaven will release in the west this June

    Lord of Magna: Maiden Heaven has been given a release date by XSEED Games, which announced the localization back in February. The title will launch for 3DS in North America on June 2 digitally and through retail. It will be an eShop only title in Europe and Australia when it releases on June 4. A […]

  • This Overlord video teases four new faces of evil

    A new Overlord game is in the works, going by the previous teasing and this video – which teases the possibility of four-payer co-op. Or just four characters to choose from. We don’t know just yet – all we know is the team is asking you to “join the fellowship.” A new entry in the […]

  • GTA movie will star Daniel Radcliffe as Rockstar’s Sam Houser, the BBC confirms

    The GTA movie Game Changer will star Daniel Radcliffe as Rockstar co-founder and president Sam Houser, theBBC has confirmed. The BBC also confirmed Bill Paxton will play Jack Thompson, a role Paxton already confirmed last week when speaking with Deadline. Here’s the synopsis per the BBC: “Conceived for an adult audience, this special 90-minute drama […]

  • Take a look at Etrian Odyssey 2 Untold’s Classic Mode

    Etrian Odyssey 2 Untold’s Classic Mode has received a trailer today. Etrian Odyssey 2 Untold will come with two modes, Classic and Story. Classic Mode was trailered today and in it, you’ll get to make your party by choosing from 13 classes. You’ll be able to customise them too using the character creation tool. Revamped […]

  • Shovel Knight: Plague of Shadows to come with new challenge mode

    Shovel Knight’s upcoming expansion Plague of Shadows will bring with it a new challenge mode. Shovel Knight developer Yacht Club Games has revealed the challenge mode, one of the new additions coming to the game with the free Plague of Shadows expansion. “Are you more into digging than distillation? Already have your Feats book long […]

  • Nvidia releases complete graphical guide for GTA 5

    Those with GeForce cards will be happy to know that Nvidia has released a comprehensive graphical tweaks guide for GTA 5. Nvidia usually produces graphical guides for the big AAA games, and GTA 5 is no different. Their guides offer in-depth coverage of each in-game setting, how much they affect framerate, if they can be […]

  • Cthulhu voodoo: why Bloodborne is the best Lovecraftian game

    Sherif Said tackles Bloodborne’s links to Lovecraftian horror, explaining why you should face the madness and immerse yourself in its lore. Spoilers inside. No other game could commit to its themes so religiously without feeling the need to compromise its vision and veer towards accessibility. Bloodborne stands tall above any game that dares attach itself […]

  • WWE 2K15 is coming to PC this year

    WWE 2K15 will make its way to PC this spring. WWE announced that WWE 2K15 will make its debut on PC in the spring. The game will be based on the PlayStation 4 and Xbox One versions, both of which came out in November. MyCareer and 2K Showaces modes are included, as well as all […]

  • GTA 5 PC: new mod adds snow to GTA Online

    If you’re looking to get some snow in your GTA Online, someone figured out a way. Modder ECB2 created a mod that works with GTA Online on PC. The mod is called “Snow in GTA Online” and it does what it says on the tin. YouTube channel imperfectplayers captured a video showing it in action. […]

  • Deals with Gold: Call of Duty edition

    Xbox Live Deals with Gold for the week of April 20 are now live with mostly Call of Duty games. Various Call of Duty games are on sale on Xbox One and Xbox 360 through Xbox Live this week. Indie games Never Alone and We Are Doomed managed to sneak in as well. With the […]

  • Mortal Kombat X: PSN sign in problems fixed in new patch

    Patch 1.03 is now live for Mortal Kombat X and it brings an end to the aggravating sing in issue encountered by some users on PS4. Mortal Kombat X 1.03 patch has been released. The patch fixes bug CE-34878-0, which affected the PlayStation 4 version. The bug caused users to have to log in and […]

  • GTA 5 PC: new patch fixes Windows Media Player issue, getting stuck in the clouds

    GTA 5 has received a new patch on PC to fix issues caused by the lack of Windows Media Player and getting stuck between online matches. Patch 335.1 is now available to all owners of GTA 5 on PC. The strange issue that affected those who didn’t have Windows Media Player installed, has been fixed. […]