Electronic Arts announced this week that it has agreed to be purchased by a consortium of investors for $55 billion, which will take the company private. It’s one of the largest all-cash deals in the history of the industry, and also big news considering the entities that are in the consortium: The Saudi Public Investment Fund (PIF), private equity firm Silver Lake and investment firm Affinity Partners.
With this much money and these investors involved in the deal, naturally it raises questions about what kind of effects this deal could have on the games industry as a whole, and for gamers who play EA’s titles in particular. GamesBeat reached out to several analysts to get a better understanding of the potential aftershocks of a deal this big.
The consensus among many of the analysts who offered comment was that this acquisition’s purpose is to jumpstart EA’s flagging growth, while also capitalizing on its name recognition and reputation.
Eric Bellomo, Pitchbook’s senior gaming analyst, said in a comment to GamesBeat, “The acquirer’s challenge will be to restart revenue growth while cutting costs… Modest cost-cutting via layoffs is expected, but a more significant focus on revenue will emerge by focusing separately on EA’s sports business versus all other lines of business. Layoffs and cost containment may follow, but the near-term profitability expectations have eased.”
Why is Saudi Arabia paying so much for Electronic Arts?
Joost van Dreunen, startup advisor and co-founder of SuperData Research, told GamesBeat: “The selling price doesn’t make sense unless you include the fact that it’s a clout-chasing effort. PIF is purchasing prestige and focused less on profitability. In the short-term it’ll provide some air cover, especially with Battlefield 6’s release coming up. I anticipate some ‘right-sizing’, of course, if nothing else because not all existing EA employees or managers will want to relocate to Saudi Arabia. But it won’t be nearly as bloody as it would be if it had been bought by a classic private equity fund looking to do a houseflip.”
Matthew Ball, CEO of advisory firm Epyllion, said on LinkedIn, “EA has long discussed merging with large media companies that boast large sports networks (e.g. ESPN or NBC Sports)… I imagine the goal here is partly to buy/distribute traditional sports, and then augment it with interactivity and surround it with myriad other community features. That’s a very long game and a costly one few can play (Netflix, Amazon, Apple). It also has massive upside with clear enough business cases.”
But the implications go beyond just the numbers — many are wondering what kind of effect this acquisition will have on the company’s employees. Amir Satvat, who runs the Games Community on LinkedIn for helping those in the industry find employment, did a breakdown of EA’s current numbers, including its debt figures. He concluded: “No matter how you haircut the numbers, the conclusion holds. Unless EA delivers a revenue miracle completely out of step with the last five years of low single-digit growth, many people could lose their jobs, OR the company will have to make deep cuts in marketing and other spending lines to make the math work.”
Dylan Koehler, analyst for Third Bridge, added in a comment to GamesBeat, ” As Electronic Arts edges closer to privatization, the deal will be partially financed by EA taking on $20 billion in debt, so investors will be keen to see how AI can help the company cut costs. Across the industry, development costs have been rising steadily, and EA is no exception… Our experts say the most significant lever for cost control is AI, which can automate much of the expensive content creation and even boost coding productivity. The potential is to replace large chunks of people-heavy workflows with AI-driven processes, cutting costs without necessarily sacrificing quality.”
Edit 10/03/2025: We’ve added Dylan Koehler’s comment, which was originally supposed to be included, to the article.