"Sea-change" and "savage streamlining": The games industry reacts to EA's historic $55 billion deal
- “It's not every day you see $55 billion spent on a digital football sticker album and some loot boxes.” - Kelly Vero
- “I think it marks a real departure in how the games industry is seen by the finance community.” - Nicholas Lovell
- “The company will need to repay its debt, so it will probably be focusing on driving its more profitable franchises.” - Louise Wooldridge
Today saw confirmation that Electronic Arts will be acquired for $55 billion by a consortium led by Saudi Arabia’s Public Investment Fund, Silver Lake and Affinity Partners in an all-cash deal, marking a defining moment for the games industry.
But what does this really mean for EA, its talent and the broader video games industry? We spoke to our Mobile Mavens to get their take on the big deal.
Louise Wooldridge
This buyout will likely lead to rationalisation and some talent migration - job losses and potentially even studios being sold off.
The company will need to repay its debt, so it will probably be focusing on driving its more profitable franchises, which means innovation in the coming years is unlikely.
“EA currently underperforms in certain areas of the market like mobile, and there are some synergies between it, PIF and Silver Lake's existing games and sports assets which could support wider growth.”Louise Wooldridge
EA currently underperforms in certain areas of the market like mobile, and there are some synergies between it, PIF and Silver Lake's existing games and sports assets which could support wider growth.
There are really two immediate growth opportunities - expanding the EA Sports FC audience further in the US during the World Cup season, and building on the hype around the latest Battlefield instalment. This deal also strengthens Saudi Arabia's soft power in sports and esports in the build up to the 2034 World Cup (which is set to be hosted by the KSA).
This deal will transform Saudi's PIF (Public Investment Fund) into one of the largest global games publishers, plus it accelerates the import of talent into the KSA.
There is strong alignment here in terms of esports, too.
Nicholas Lovell
My initial thought is that it marks a sea-change in investor perceptions of the industry. Leveraged buyouts are driven by predictable cashflows – the lenders care more about reliable margins, and will put strict covenants on EA which limit its room for investment. They typically prefer predictable, low-growth business.
“My initial thought is that it marks a sea-change in investor perceptions of the industry. Leveraged Buyouts are driven by predictable cashflows.”Nicholas Lovell
Which means that this is another sign that the games industry is maturing and going ex-growth. This has the potential to affect valuations across the sector, as EBIT multiples collapse from “growth multiples” to “mature multiples”.
It also puts a real limit on EA’s ability to invest in innovation and new IP. LBO companies are squeezed for cash profitability, not long-term investment.
So I think it marks a real departure in how the games industry is seen by the finance community. And it will take a while for the implications of this to filter through.
Will Luton
None of the funds are really games specialists and from my very limited understanding of how private equity tends to work this deal will be highly leveraged and EA will spend the rest of its time under this ownership servicing that debt.
So my expectations are that what happens next is some pretty savage streamlining as they attempt to cut costs and increase profits from the company’s annual stalwarts, live service “forever games” and subscriptions (EA Play).
“I can’t see a world where this buyout is on the basis that there is huge growth in EA on the basis of new and innovative content nor that the market itself is rapidly expanding. ”Will Luton
If I had to guess what it means for the games (having not looked at any of EA’s financials), I would say:
- Apex Legends monetisation pressure increases with a lean towards pay to win. It is currently very light and cosmetics focused.
- Ultimate Team type experiences get extended and pushed everywhere across the portfolio.
- Skate gets cut and Full Circle closed.
- Either there is some acquisition of existing back catalogues to broaden EA Play or a deal with one of the major subscription services and a closure.
- Closure or spinning out of smaller parts of the business, like Pogo.
I can’t see a world where this buyout is on the basis that there is huge growth in EA on the basis of new and innovative content nor that the market itself is rapidly expanding.
Innovation is risk and the console/PC markets are very mature. I think more it’s these entities looking at EA and seeing a mature games business that has rare predictability that could be stripped, streamlined and milked.
Alternatively, perhaps the intention is to use EA to roll up lots of similar games businesses under one roof with shared publishing power. For example, picking up Ubisoft and merging the two would lean into a EA Play expansion. The portfolios are pretty complimentary.
Claire Rozain
This $55 billion acquisition is one of the most significant moments in gaming history - and it should be seen as a huge opportunity for the people at EA. Private ownership can unlock freedom to innovate beyond quarterly earnings, from AI-driven game design to more immersive player communities.
“This $55 billion acquisition is one of the most significant moments in gaming history - and it should be seen as a huge opportunity for the people at EA.”Claire Rozain
But the bigger opportunity lies in people. Today, women represent less than 30% of the global gaming workforce and Black professionals just 4% in the US, while the player base is more than 45% women and increasingly multicultural. That gap is both a challenge and an untapped growth engine.
If the consortium uses this moment to reinvest in talent, amplify diverse voices, and embed inclusion at the heart of innovation, EA could not only accelerate its creative edge but also set a new industry benchmark for sustainable, equitable growth.
Kelly Vero
I suppose it's not every day you see $55 billion spent on a digital football sticker album and some loot boxes. EA has always played the long game on monetisation, so the only surprise is that sovereign wealth wants in on Ultimate Team.
“EA has always played the long game on monetisation, so the only surprise is that sovereign wealth wants in on Ultimate Team.”Kelly Vero
Opportunities? Someone gets a seat at someone's esports table. Risks? The same as always: creativity being measured against quarterly revenue, while developers wonder if the real game is in the boardroom rather than the console.
For the rest of us, it’s business as unusual: men in suits waving their appendages at one another and calling it strategy.
That dog sipping tea while everything burns is about as good as we're gonna get in 2025. As you were, everyone.
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