Electronic Arts, the mega-publisher behind video game franchises like The Sims, Battlefield, and Madden NFL, is set to be purchased for $52.5 billion in what could be the largest private equity buyout in history. The deal will see EA go private by way of a consortium which includes Silver Lake Partners, Saudi Arabia’s Public Investment Fund (PIF), and Affinity Partners, a fund being run by Jared Kushner.
Under the terms of the agreement, EA shareholders will receive $210 per share. PIF, which already owned 9.9% of EA, will roll its existing equity into the deal. This deal would, if fully approved, end EA’s 36 years as a publicly traded company.
The gaming giant will remain headquartered in Redwood City, California, and Andrew Wilson will continue as CEO of EA. “Electronic Arts is a phenomenal company with a world-class management team and a vision for the future that is ambitious,” Kushner said in a statement. “I have admired their ability to make iconic and lasting experiences and as someone who grew up playing their games — and has now enjoyed them with his kids — I could not be any more excited for what’s in store.”
Saudi Arabia’s Broader Gaming Aspirations
This deal greatly expands Saudi Arabia’s already emerging presence in the global gaming industry. PIF has been in the headlines in the last several years from buying stakes in major game publishers, and private acquiring esports companies like ESL and the FACEIT. The sovereign fund has signaled it wants to expand its gaming arm, Savvy Gaming Group, and analysts are calling this purchase its most impactful step so far.
According to Raymond James’ Andrew Marok, the deal is aligned with the kingdom’s wider gaming strategy. “Importantly, the Saudi PIF has been a very active player in the more traditional video gaming market since 2022, and the EA deal would be the largest acquisition but by a long way,” he said.
Silver Lake knows a thing or two about noteworthy purchases, specifically in the tech space, as they acquired Skype for $1.9 billion in 2009 and they led the just under $25 billion Dell buyout back in 2013 before Dell returned to the public markets in 2018. EA could have a longer runway while it assesses the industry upheaval and takes steps to adapt.
Publicly traded game companies often feel compelled to make short-term decisions to appease investors. Taking EA private may create a space for EA to pivot its model — especially with competitors Epic Games, Take-Two Interactive, and Microsoft’s Activision Blizzard scaling up quickly. Microsoft’s $69 billion Activision Blizzard acquisition closed along with the horizon quickly changing competition landscape for leading publishers. EA’s own finances have peaked in the last couple of years as revenue remained stuck between $7.4 billion and $7.6 billion during the last three fiscal years.
While layoffs are generally expected post buyout, no EA specific workforce reductions have been rumored or proposed. The company cut their workforce by 5% in early 2024, and in May 2024 another round of cuts were made, finishing the quarter with about 14,500 employees. The deal still needs approval from EA shareholders and is expected to close in Q1 of 2027. In pre-market trading EA shares were up over 5% on the news. If the proposal is finalized, this will be a dramatic shift for both Electronic Arts and the gaming industry in general.
