Shawn Fanning sells third brainchild to EA

( OOPS: This post previously said TechCrunch reported the deal two weeks ago. It was actually almost a month ago.)

Shawn Fanning, best known as the founder of pioneering file-sharing service Napster, has finally earned some money.

Electronic Arts said tonight it had acquired his latest company, ThreeSF, and its video-game service Rupture. A person familiar with the deal said EA had paid roughly $30 million.

After introducing tens of millions of users to the awesome power of peer-to-peer networking -- or at least to all the free music they could eat -- Napster went bankrupt in a blaze of glory. 

Fanning never had voting power over that creation, and he started over with SnoCap, which tried to keep the best elements of Napster but added legal copyright controls. SnoCap faltered as the unauthorized peer-to-peer outfits inspired by Napster continue to grow. The company was sold in April to music-oriented social networking site iMeem for not very much money.

By then, Fanning had moved on to ThreeSF's Rupture, a San Francisco company that allows computer-game players to automatically spread word of their online accomplishments.

When the widely read blog TechCrunch wrote a month ago that gaming giant EA had bought Rupture for a reported $30 million, it wasn't true. But it is now.

Rupture could give EA a crucial tool for becoming a force...

... in the potentially lucrative market for multi-player online games, which generates $1 billion in annual subscription fees alone in the U.S., according to research firm NPD Group.

Under its new chief executive, John Riccitiello, EA has made strategic acquisitions to fill in the gaps of major game genres that were previously absent from the company’s portfolio. One of those gaps was the so-called massively multi-player online role-playing genre, which includes World of Warcraft and EverQuest.

EA got a foothold in the business when it bought Mythic Entertainment, producer of Dark Age of Camelot and developer of the upcoming online title Warhammer, in June 2006.

But the field continues to be dominated by World of Warcraft, which has more than 10 million subscribers paying roughly $15 a month to play. The game’s developer, Blizzard Entertainment in Irvine, is in the midst of a merger with EA’s archrival, Activision.

-- Joseph Menn and Alex Pham

Photo: Joi Ito via Flickr

Comments

[Adam Hyman]

This happened a month ago!!

LOL

[mike]

You should really edit this post to credit techcrunch.

[Jacob]

So techcrunch just happened to guess the right amount 2 weeks before it happened? Give credit where its due

[Alex Pham and Joseph Menn]

Mike indeed got the outlines of the deal right in his post, and we fully credit him for breaking the news. He simply jumped the gun by reporting it. The two companies had not settled on the terms of the deal, including the price. Mike acknowleged this by updating his post to say that the deal had not yet been consumated.