Electronic Arts (EA) Acquired by Saudi-Led Consortium
Electronic Arts (EA), one of the world's largest video game companies, has been acquired by a consortium led by the Saudi Arabian Public Investment Fund (PIF), Silver Lake, and Affinity Partners. The transaction is valued at $55 billion, with a significant portion ($19 billion) financed through debt, making it the largest leveraged buyout in history. As a result, EA will no longer be publicly traded.
The purchase price represents a substantial premium of 25% over the company's market value. This acquisition is the second-largest in the history of the video game industry, following Microsoft's $69 billion purchase of Activision Blizzard, the publisher of Call of Duty.
Background and Implications
The acquisition of EA is not surprising in itself, but the nature of the buyer is. A private investment fund is an unexpected player in this deal, and some have expressed concerns that the transaction may lead to a massive debt burden for the company. The revenue generated by popular games such as EA Sports FC, Madden, and Battlefield 6 will be used to service this debt, which could impact EA's ability to invest in new games.
EA has been responsible for some of the most successful video game franchises in history. Its football titles, now known as EA FC, have sold over 325 million copies since their initial release in 1993. The Sims has sold over 200 million copies, and Need For Speed has sold over 150 million.
Saudi Arabia's Growing Presence in the Gaming Industry
The acquisition of EA will be a significant boost for Saudi Arabia, which has been expanding its presence in the sector in recent years. In March, PIF spent $3.5 billion to acquire Niantic's video game division, taking control of the popular mobile game Pokémon Go. This acquisition was integrated into ScopelyInc, the creator of Monopoly Go, which was itself acquired by Savvy Games Group, a PIF subsidiary, for $4.9 billion in 2023.
The kingdom has been making waves in the esports industry by hosting major tournaments, including the esports World Cup, and will also host the 2027 esports Olympic Games. It also holds stakes in other major video game companies, such as Nintendo and Take-Two Interactive, but the acquisition of EA marks a significant expansion of its influence in the industry.
