You may have heard the rumours, but it is my duty to inform you that yes - Electronic Arts has acquired VG Holding Corp., who owns both BioWare and Pandemic Studios.

Both of these companies have created some of the best-quality games in the industry (BioWare bringing NeverWinter Nights, Baldur's Gate, Star Wars: Knights of the Old Republic, as well as Pandemic's Destroy All Humans!, Full Spectrum Warrior and Dark Reign 2) which will give EA a much-needed boost in the areas of action, adventure and role-playing games.

There are ten franchises currently being developed by the two studios, including six games which they own totally.

* BioWare are in the early development stages of a new massively multiplayer online game, while they are also reaching comppletion on the highly-anticipated Xbox 360 sci-fi RPG Mass Effect, to be published by Microsoft in November. * Pandemic Studios are taking the lead in the open-world gaming genre, with their upcoming Saboteur and Mercenaries 2, as well as several unannounced projects in the pipeline.

BioWare games: NeverWinter Nights, Mass Effect, Star Wars: Knights of the Old Republic
Combined, the two studios employ around 800 people through their four studios - in Edmonton, Canada; Los Angeles; Austin, Texas; and we've even got one Down Under, in Brisbane.

John Riccitiello, EA's Chief Executive Officer explains:

"These are two of the most respected studios in the industry and I'm glad to be working with them again. They'll make a strong contribution to our strategic growth initiatives on quality, online gaming and developing new intellectual properties. We also expect this will drive long-term value for our shareholders."

The five leaders of the studios (three from Pandemic, two from BioWare will join the EA Games label after the acquisition.

President and Co-founder of Pandemic Studios, Josh Resnick, is among them:

"Pandemic Studios remains focused on attracting the best talent and creating blockbuster action games. As a worldwide publishing leader, EA represents the ideal partner to bring our titles to market as global entertainment events."

Ray Muzyka, Co-founder and CEO of BioWare Corp adds:

"We are truly excited by John Riccitiello's new vision for EA. This vision is consistent with BioWare's focus on crafting the highest quality story-driven games in the world. It will enable us to further the careers of the passionate, creative and hard working teams at BioWare Edmonton and BioWare Austin."

Pandemic games: Saboteur, Destroy All Humans! 2, Mercenaries 2
In case you were wondering how much it costs to buy out two of the world's best game developers... EA will pay the stockholders of parent company VG Holding Corp. up to US$620 million, with an additional payment of up to US$155 million in equity offered to certain employees of the company, subject to performance-based or time-based vesting criteria.

At this stage it's all very unknown just what this will "mean" for the games industry. It will be interesting to see how the smaller studios get through this, and what sort of releases we'll be seeing from both developers. It could be a very good thing. It could mean more money for the developers, so they may continue working hard on what they love, and producing great games. Then again... we've seen this sort of thing before, haven't we? Let's hope EA and Midway haven't been comparing notes on "How to treat Australian development studios".