EA officially leaves the public market, going private under new ownership.
Electronic Arts (EA) announced on Sept. 29 that they would be acquired by Saudi Arabia’s Private Investment Fund (PIF), as well as Silver Lake and Affinity Partners. The transaction will total to about $55 billion, a record-breaking buyout, leaving the three investment companies $20 billion in debt. Additionally, this deal will end EA’s history as a publicly traded company after 36 years, giving all stockholders $210 per share as compensation.
EA is the 6th biggest gaming company in the world by revenue, and the second largest located in the United States, only behind Microsoft. Their games include Battlefield, The Sims, Madden NFL, along with the rest of the EA Sports games, and many other long-running franchises. On top of these games, the equity firms will be taking on over 700 million players, 14,500 employees and 32 locations across 18 different countries around the world.
A majority of the company will be owned by PIF, who already owned 9.9% of it in stocks prior to the buyout. PIF also owns shares of Activision Blizzard (the owners of the Call of Duty, Overwatch and World of Warcraft franchises) and Nintendo through their other company, Savvy Games. Silver Lake will be the second biggest owner, followed by Affinity Partners. Like PIF, Silver Lake already holds a stake in the gaming industry through Unity, a platform used to create video games and they are also the 15th largest equity firm in the world through various other investments.
While the future of the EA is unknown, the $20 billion debt sum leads many to believe budget cuts are awaiting the company, which could potentially include laying off large amounts of employees and putting less funds into the games. It is also suspected that higher prices will be introduced as well as additional microtransactions, or in-game purchases. These are already very prominent in many of EA’s games, with them oftentimes having made over half of their annual revenue from microtransactions alone. The acquirers of the company have also already made a statement saying that they plan to invest more time and money into mobile games in order to clear the debt, with EA already owning 18 mobile games from a variety of their franchises. It is also suspected that the new EA owners will end up selling off one or multiple of their series, though it is unknown which games this is likely to happen to or what companies they would consider selling to.
Another concern affecting many players is the worry about how PIF acquiring the company may affect the representation of characters in the games or even in EA’s employment. Multiple cases have come out over Saudi Arabia’s discrimination towards minorities, lack of civil right laws and threats against journalistic freedom. Since PIF is a part of Saudi Arabia’s government, it’s possible that some of these restrictions and viewpoints carry over into the games, especially since some of the games from The Sims franchise are banned in Saudi Arabia due to its inclusion of LGBT+ representation.
Though it is possible for another company to outbid PIF, Silver Lake, and Affinity Partners before the buyout is finalized, it is unlikely due to the record-breaking sum the three equity firms are offering. It has been stated that the EA headquarters will remain in Redwood, California and Andrew Wilson will continue his position as the CEO. The company is expected to transfer ownership sometime in 2027.
