Electronic Arts sells out to a conglomerate of investors for $55b USD
There were rumours last week of it happening and overnight it was confirmed, Electronic Arts is going private, after agreeing to a buyout offer from three different investment groups. The cost $55 billion USD or roughly $83.6 AUD, with the transaction expected to close sometimes before July 30 2026.
The consortium, that is how EA are calling them in their statement, are made up of three groups, PIF, Silver Lake, and Affinity Partners. The last two are unlikely to be known to gamers, but that first one goes by the full name of Public Investment Fund and is owned in full by the Saudi Arabian government.
“Our creative and passionate teams at EA have delivered extraordinary experiences for hundreds of millions of fans, built some of the world’s most iconic IP, and created significant value for our business. This moment is a powerful recognition of their remarkable work. Looking ahead, we will continue to push the boundaries of entertainment, sports, and technology, unlocking new opportunities. Together with our partners, we will create transformative experiences to inspire generations to come. I am more energized than ever about the future we are building.”
The official press release about the deal has quotes from the companies making the buy, but I won’t share those here. Where things get annoying is with the breakdown of the $55b, because its not as simple as you might think.
First, the actual cost of EA is $36b with the rest being debt, yes in order for the deal to go through, EA is picking up $20b USD worth of debt. Now, anyone who has ever bought a car second tells you, if the car is cheap but you then need to spend thousands and thousands of dollars on it, then it was not a cheap car, that is happening here.
That $20b in debt means that EA will need to try and offset it somehow. Now they could be nice and fire all those executives who approved this deal and save themselves millions and millions of dollars in bonuses, heck they could even spread the debt out over year.
No, what will happen as is always the case, EA will close studios and lay people off. That is how companies always restructure their debts, but targeting people who actually contribute to the company. There is a statement in that press release from Luis A. Ubiñas, Lead Independent Director of EA’s Board of Directors, where they claim this is the best deal for the company, but again at what cost.
We saw this when Microsoft bought Activision-Blizzard-King, they said they would not make changes, and since then they have laid off thousand and thousands of workers, closed down a half-dozen studios and keep trying to gaslight people into supporting them. Embracer bought up dozens of studios over a number of years, then when they had too much debt, they laid off folks, closed down studios and sold others.
This could not matter in the grand scheme, things could turn out to be for the best, but history has shown this is never the case and this is not even counting the issues with Saudi Arabia as a country. If you are a fan of Electronic Arts games, I would suggest picking up the ones you want, because I doubt there will be many going forward.
