Gaming giant Electronic Arts has been looking closely at acquiring a leading social gaming company, Playfish, we and others have heard from multiple sources in the last couple weeks. However, we have since heard some new details about the valuation, and where the companies are at in the sale process.

Whether the deal goes through or not is significant for the still-young social gaming industry (if “industry” is even the right term at this point). A sale price would help put a valuation on many of Playfish’s rivals, and bring additional credibility to social gaming’s role within the larger gaming world.

EA has been doing due diligence on Playfish, we have heard from multiple sources, meaning it has been going through the company’s financial reports and other information to determine that it indeed does want to make the purchase. We do not know if the deal has fully closed yet. Our understanding is that Playfish has been in a “no shop” period, meaning it won’t talk other potential acquirers as EA completes its review. However, some sources have previously said that the deal may have already closed. We have also heard that Playfish’s banker is J.P. Morgan.

Neither company is speaking publicly about the deal.

Following up on our original story last week, Business Insider published a rumor saying that EA may buy Playfish for $250 million. We had heard the same number, but that it is “way too low,” multiple sources have since told us. One reliable industry insider we spoke with believes the amount is “north of $400 million.” But we have also heard that the number was “less than $200 million.” Hmm. Perhaps the “north of $400 million” number includes some sort of earn-out plan? For sake of comparison, kids virtual world Club Penguin sold to Disney in 2007 for $350 million, with the possibility of earning another $350 million based on performance over the next years.

[Update: Over in London, TechCrunch Europe hears similar things: "Our sources say that Playfish is holding out for another offer, somewhere between $350m at the low end and $500m at the top end, either from EA or another suitor." It also hears that EA may be looking at buying casual gaming site King.com instead of Playfish.]

In any case, we estimate that Playfish could be currently doing roughly a $75 million run rate at the moment, through games like Pet Society, Restaurant City, and a range of others. The company now has around 12.5 million daily active users across all its apps on Facebook, its core platform, so we’re assuming about $0.50 average revenue per user (ARPU) per month in this calculation. Revenue comes primarily through virtual goods in its games. We project that the total US virtual goods market this year will be just over $1 billion, based on our Inside Virtual Goods report.

If the higher price is accurate, it should make many social gaming companies happy. After last week’s reports, we heard widespread concern about the $250 million number among social gaming companies, as it was less than what many believe Playfish to be worth.

EA’s position

One reason neither company will comment could be, of course, that the deal is not yet closed.

Another reason could be that EA is going to be announcing its quarterly earnings next Monday, October 26. Until then, EA is in its quarterly blackout period, when it doesn’t reveal financial information that may affect the stock price.

At an industry event last week, EA chief operating officer John Schappert was asked about various rumors concerning EA acquiring other companies (he was also, by the way, asked about rumors concerning other companies potentially acquiring EA). “Schappert said he couldn’t comment on those rumors,” according to VentureBeat, “and that EA is in its quarterly quiet period just before it reports financial results in the next few weeks.”

We’ll see what EA has to say next week.

The company has $2 billion in cash; assuming any acquisition would be a combination of cash and stock, it could fairly easily afford to purchase Playfish. Other comments by Schapper are also interesting to parse in this context. He compared social games to mobile games last week, and called it a “bubble.” He was referencing his company’s purchase of mobile game maker Jamdat in 2005 for $680 million in 2005. “Schappert thinks that companies such as Zynga are ‘scrappy,’” according to the report, “but he noted that some of the startups will start to come down to Earth because they will have trouble making games for more than one platform.”

Where is Playfish? Mostly on Facebook’s platform, to be sure, but it has also been expanding to the iPhone, Android devices, and other platforms. Also, Schappert said that the social gaming industry will mature in the next two years, and that popular social games will become familiar brands, “not games that we’ve never heard of.”

Those sound like mixed messages to us. EA has had a decent couple of quarters, but it has suffered during the recession along with other gaming companies. In the meantime, companies like Playfish have come to dominate gaming on Facebook. EA has tried and not had significant social gaming hits, to our knowledge. We believe an acquisition would make sense for the company, and given Playfish’s focus on making quality games, the fit could work.

But, as we wrote last week, there are various reasons why a deal wouldn’t happen. Perhaps, for example, Playfish has decided or will decide that its best opportunity is to go solo for the time being.

To dig deeper into the virtual goods market, check out our new report: Inside Virtual Goods: The US Virtual Goods Market 2009 – 2010.