Electronic Arts Purchased In Record Breaking $55 Billion Acquisition By Saudi Arabian Public Investment Fund

Video game company acquisitions are becoming larger as time rolls forward. This latest potential purchase sets new records for the industry, as Electronic Arts will become privately owned, following a stock buyout by the Saudi Arabian Public Investment Fund, Affinity Partners, and Silver Lake. EA, of course, develops and publishes the Madden franchise, Dragon Age, and the EA Sports FC football games, along with the upcoming Battlefield 6 (launches October 10th), and has been one of western gaming's largest developers.

Affinity Partners is an American investment firm owned by President Donald Trump's son-in-law Jared Kushner, it was formed in 2021. But despite being American-owned, its investments range from international countries like Africa, Israel, parts of Asia, and the Middle East. It's a firm that is stoked in controversy, as the ties Kushner has with the Saudi Crown Prince Mohammed bin Salman, which saw the fund receive $87 million from the Saudi government. This has led to allegations that Affinity Partners may have been used as a slush fund. It has been written that as of 2024, there have been no investment returns for its clients.

Silver Lake is a private equity firm that invests in technology ventures. In 2021, they purchased 33% stake in Australian Professional Leagues. They also have investments in Klarna, Expedia Group, and AMC.

What does this deal potentially mean for Electronic Arts? Financial certainty. Given the climate of the video game industry, which has seen a rising price in software and consoles, the bar for financial growth may be hitting a threshold for consumers. This also has an impact on the bottom line and projections from publishers when it comes to sales. Battlefield 6 is gearing up for a strong launch, but EA Games has seen titles underperform upon launch. Recently, Dragon Age: The Veilguard, despite good public reception (selling 1.5 million copies) was deemed as an underperforming release. The Dead Space Remake, also beloved, saw 2 million copies sold, but was also seen as a commercial failure, prompting EA to not seek any ventures into producing more remakes of the series any time soon. Electronic Arts has been heavily carried by its sports franchises (and in-game currency spending through DLC and microtransactions), and in inflating development costs for video games, the return on profits become smaller. The recent return of Skate (launching September 16th) as a free-to-play title has been met with largely negative reception for being a rather bare bones experience thus far. Does this move make video games better? That remains to be seen. It seems more like a deal that secures the portfolio.

For Saudi Arabia, they continue to strengthen their foothold, investing in video games, movies, and music to sportswash their public image. We've seen it with the recent purchase and ownership of the Evolution Championship Series, and hosting of fighting game and eSports tournaments. Strong business partners with WWE, the 2026 Royal Rumble will be held in Riyadh. The fallout from this could have repercussions. Saudi Arabia certainly has a great deal of income, as it's one of the world leaders in fossil fuels. The shift to tech ventures is the wave of the current market, but what happens to all these entertainment outlets when the money runs dry? The video game industry is moving into uncharted territory, will this be sustainable?

Barring regulatory approval, the deal should close by first quarter 2027.