The Problems with EA's $55 Billion Buyout

https://news.ea.com/press-releases/press-releases-details/2025/EA-Announces-Agreement-to-be-Acquired-by-PIF-Silver-Lake-and-Affinity-Partners-for-55-Billion/default.aspx

Just two weeks ago, I was voicing my concerns about how EA was handling the monetisation of The Sims 4. Oh boy, what a surprise bombshell this has been. Electronic Arts, the publisher behind some of the most iconic franchises in gaming history, has agreed to be taken private in a record-shattering $55 billion deal.

We've seen beloved publishers swallowed by bigger entities before for reasons that have nothing to do with making better games. The Activision buyout was bad for different reasons, but the outcome is often the same: the top brass walk away with obscene payouts while the company, its employees, and its players are left to deal with the consequences.

I'll say this right now: there is nothing good that will come out of this for players or developers. Not a single damn thing. It's crucial to understand what this deal is: a financial manoeuvre known as a leveraged buyout (LBO), which has a dark history. It is fundamentally different from a strategic acquisition, such as Microsoft buying Activision to bolster a platform. Let's break down the biggest problems this creates.

Problem 1: The $20 Billion Anchor of Debt

The single most critical problem is the very structure of the deal. This is the largest leveraged buyout in history, surpassing the previous record set in 2007. To understand why that's terrifying, you need to know how an LBO works.

The investor group isn't just paying $55 billion out of pocket. They are financing the deal with a staggering $20 billion in debt, provided by JPMorgan Chase. In an LBO, the assets of the company being purchased, in this case, EA's studios and beloved IPs like Battlefield, The Sims, and Apex Legends, are used as collateral for that loan.

This means the responsibility for paying back that $20 billion falls squarely on EA itself, not the investors who bought it.

Think about what that means. From the moment the deal closes, EA's primary corporate mission will fundamentally change. Instead of focusing on making great games to generate profits for reinvestment and growth, its main goal will be generating enough raw cash to make massive, non-negotiable debt payments to a bank. Every dollar of profit that could have gone into a new IP, a more polished game, or supporting its developers will now be funnelled into servicing this colossal debt.

Problem 2: The New Owners

The future of EA will be decided by a consortium of three completely different entities, each with its own troubling agenda.

• Silver Lake Partners: This is a classic private equity firm with a well-known playbook. They take companies private (like they did with Dell and Skype), load them with debt, aggressively cut costs to maximise profitability, and then sell them off for a huge return within a 5-to-7-year window. Their goal is focused on streamlining an asset for a profitable exit, not on fostering a creative environment. This short-term focus is fundamentally incompatible with the long, expensive, and creatively risky nature of modern AAA game development.
• Saudi Arabia's Public Investment Fund (PIF): This is the sovereign wealth fund of Saudi Arabia, controlled by Crown Prince Mohammed bin Salman. The PIF has been aggressively investing in gaming as part of its "Vision 2030" plan to diversify the kingdom's economy away from oil. I absolutely abhor the litany of human rights abuses the Saudi state gets up to, and their ownership introduces a certainty of censorship. For the last decade, we've watched publishers bend over backwards to appease the Chinese market for profit. But being owned by a state actor is another level entirely. The Saudi government's laws are in direct opposition to the progressive values found in many EA games. The risk of direct censorship or, more likely, developers self-censoring to avoid angering their new owners is now a certainty.
• Affinity Partners: This is the Miami-based private equity firm founded by Jared Kushner, Donald Trump's son-in-law, immediately after leaving the White House. The firm's primary funding is a $2 billion investment from the very same Saudi PIF, a deal reportedly pushed through by the Crown Prince himself. Kushner's involvement has already drawn scrutiny from the U.S. House Oversight Committee over potential conflicts of interest. This adds a layer of deeply polarising U.S. politics and ethical controversy to an already toxic mix.

Problem 3: Hollow Words and the Cost-Cutting Axe

In a memo to employees, EA CEO Andrew Wilson called this a "historic moment" and claimed the company is entering a "new era of opportunity" where they can "amplify the creativity of our teams".

What a load of fucking bullocks.

Everything about this deal points to the direct opposite. The supposed "freedom" from quarterly shareholder reports is a lie. Shareholders can be ignored; a bank holding $20 billion in debt cannot. This pressure will crush, not amplify, creativity. How much do we want to bet he secured a massive golden parachute, just like Bobby Kotick's reported $400 million exit from Activision? It's a common feature of these deals. He couldn't give a damn if the company goes to shit; he'll have his payout. One analyst has already called the deal a "self-serving, opportunistic move by management and the investor group".

For all its public-facing, anti-consumer controversies, EA had, in recent years, cultivated a reputation among some developers as a relatively stable place to work, offering good benefits and opportunities. That is now over. The private equity playbook is clear: aggressive cost-cutting is the first order of business. The gaming industry is already in a painful "reset phase," with an estimated 35,000 jobs lost since 2022. EA itself has already had multiple rounds of layoffs. With a $20 billion debt to service, further and deeper cuts are not a possibility; they are a mathematical certainty.

And we already know their primary method. The new owners are making a "huge bet" that generative AI can "significantly cut EA's operating costs" to manage the debt. These clueless and out-of-touch investors are banking on AI to replace developers and actors, automate play testing, and generate assets. So much for amplifying creativity. The plan focuses on replacing developers with algorithms to ensure a bank gets its money back.

Problem 4: The Inevitable War on Players and Creativity

My previous concerns about the aggressive monetisation of The Sims 4 are going to pale in comparison to what happens once that $20 billion debt hits the books. The need to generate maximum cash flow will lead to two disastrous outcomes for the games themselves.

First, monetisation will be pushed to its absolute limit. EA is already a company with a history of anti-consumer practices, from the infamous "pay-to-win" Star Wars Battlefront II loot box scandal to the gambling-like mechanics in its Ultimate Team modes. Now, operating as a private company shielded from public market sentiment, they will be free to experiment with even more disgusting forms of monetisation. If you think the big money-maker sports titles are bad now with their minimal yearly effort and egregious microtransactions, prepare for trouble, and make it double.

Second, this will cause creative stagnation. A company this deep in debt will not take risks. The new ownership will be incentivised to funnel resources into its most predictable and lucrative properties: the annualised sports franchises and live-service games like Apex Legends. Creatively ambitious, single-player narrative games like Dragon Age and Mass Effect represent significant upfront investments with uncertain returns. They will be seen as an unacceptable financial risk, leading to an era of safe, iterative sequels while innovation withers and dies.