XML 29 R14.htm IDEA: XBRL DOCUMENT v3.19.1
Business Combinations
12 Months Ended
Mar. 31, 2019
Business Combinations [Abstract]  
Business Combinations
(7) BUSINESS COMBINATIONS
GameFly Cloud Gaming
On May 3, 2018, we acquired cloud gaming technology assets and personnel from a wholly-owned subsidiary of GameFly, Inc. based in Israel (“GameFly Cloud Gaming”) for total cash consideration of $50 million. The purchase price was allocated to the acquired net tangible and intangible assets based on their estimated fair values as of May 3, 2018, resulting in $43 million allocated to specific intangible assets, and $7 million allocated to goodwill that consists largely of expected synergies and workforce. Substantially all of the $50 million is expected to be deductible for tax purposes. Subsequent to the acquisition, we also granted approximately $4 million in long-term equity in the form of restricted stock units to certain employees.
The results of operations attributable to the assets and personnel acquired in the GameFly Cloud Gaming acquisition and the fair value of the assets acquired have been included in our Consolidated Financial Statements since the date of acquisition. Pro forma results of operations have not been presented because the effect of the acquisition was not material to our Consolidated Statements of Operations.
During the fiscal year ended March 31, 2019, we completed one other acquisition that was not material to our Consolidated Financial Statements.
Respawn Entertainment, LLC
On December 1, 2017, we completed our acquisition of Respawn Entertainment, LLC (“Respawn”), a leading game development studio and creators of games including the critically-acclaimed Titanfall franchise. The total purchase price was $273 million, which consisted of $151 million in cash and the acquisition date fair value of contingent consideration of $122 million. The purchase price was allocated to Respawn’s net tangible and intangible assets based upon their estimated fair values as of December 1, 2017, resulting in $171 million being allocated to goodwill that consists largely of workforce and synergies with our existing business, all of which is expected to be deductible for tax purposes; $74 million being allocated to intangible assets acquired; and $28 million being allocated to net tangible assets acquired.
The payment of the contingent consideration is based on the achievement of certain performance milestones through the end of calendar year 2022 at the latest. The maximum amount of contingent consideration we may be required to pay is $140 million. The fair value of the contingent consideration was included in other liabilities on our Consolidated Balance Sheet at March 31, 2018. During the fiscal year ended March 31, 2019, we recognized $14 million of contingent consideration expense in our Consolidated Statements of Operations as a performance milestone was met and the expected outcomes for other performance milestones became more positive. At March 31, 2019, the fair value of the contingent consideration of $136 million is included in accrued and other current liabilities. Subsequent to March 31, 2019, we paid $35 million of contingent consideration.
Subsequent to the acquisition, in the fourth quarter of fiscal year 2018, we also granted an aggregate of $167 million of restricted stock unit awards of our common stock to Respawn employees that is being recognized over a four year period as stock-based compensation expense in research and development in our Consolidated Statements of Operations.
The results of operations of Respawn and the fair value of the assets acquired and liabilities assumed have been included in our Consolidated Financial Statements since the date of acquisition. Pro forma results of operations have not been presented because the effect of the acquisition was not material to our Consolidated Statements of Operations.

During the fiscal year ended March 31, 2017, there were no acquisitions.