By Joel Loynds
Copyright escapistmagazine
Electronic Arts (EA) has been snapped up in a $55 billion deal backed by three main groups: the Saudi’s Public Investment Fund (PIF), Silver Lake, and Affinity Partners. This comes as rumors around a sale have been persisting all weekend, and now EA has confirmed it.
The deal will see the PIF retain its already 9.9% stake in the company, and shareholders paid out $210 per share. Yes, EA is now going private, but the 55 billion doesn’t come cheap. This is a group effort to purchase the company, with $20 billion of debt from borrowing hanging over like a guillotine.
It’s likely that to clear this debt, EA will have to resort to restructuring and layoffs, as well as other cost-saving measures. How this will play out has yet to be seen, but the company has already been through the ringer in terms of letting people go. In May, it saw another round of layoffs after a round in April, which saw 300 roles cut.
I’m unsure how many more people can actually get laid off from a company before it’s just intellectual property and someone to maintain servers.
Where’s next to cut? Presumably, in games that don’t fit the owner’s point of view. Will we ever see that new Mass Effect game, or will it end up like the Black Panther title that got scrapped? It’ll also be interesting to see how buyers like Jared Kushner and Trump Jr. from Affinity Partners or the PIF perceive something like The Sims, which mostly exists because of massive attention at its E3 debut in 1999 for featuring gay couples. It has since gone on to become a favorite of LGBT+ players.
EA hasn’t been hitting the big time recently, with a lot of hope riding on Battlefield 6 to turn its luck around. Last year, it saw its revenue drop after EA Sports FC (the rebranded FIFA games) and Dragon Age: Veilguard failed to live up to expectations. However, it wasn’t in a desperate situation.
Saudi PIF isn’t just in the pockets of EA
The Saudi PIF has been investing in just about everything in recent years. Most recently, in the nerd Venn diagram, it struck a massive deal with WWE to bring WrestleMania to the country. In regard to video games, the PIF has already invested in Grand Theft Auto publisher Take Two, Nintendo, Capcom, Embracer, and others.
It also helped Ubisoft acquire funding, which is why a two-year-old Assassin’s Creed Game, Mirage, will be getting additional downloadable content.
While not owned by the PIF, SNK is owned by the Misk Foundation, a non-profit founded by Saudi Crown Prince Mohammed bin Salman in 2011. This year, it oversaw SNK publish Fatal Fury: City of the Wolves, a fighting game that had some bizarre crossovers.
Cristiano Ronaldo, a famed footballer, was a featured character in Fatal Fury, presumed to be included due to the connection between the country’s investment in him. It also featured Savlatore Ganacci, a DJ who plays regularly at Saudi events. So, how long until we see the FIFA branding back on EA FC, considering there’s a World Cup in under a decade?
Speaking in the press release, the CEO of EA, Andrew Wilson – who will be keeping his job – said:
“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.”
Yeah, we’ll see.
