More than a week ago, the publisher of Battlefield and EA Sports FC Electronic Arts confirms $55 billion deal Funded by a consortium of investors consisting of the Saudi Arabian Public Investment Fund, US private equity fund Silver Lake and Jared Kushner's investment firm Affinity Partners. Oh, and $20 billion in debt.
The move will see EA go private, but many questions remain over what could be the largest leveraged buyout ever (according to Reuters) stay. In our search for answers, we spoke with a number of analysts to understand how the seismic buyout could impact thousands of Electronic Arts employees, its products and the video game industry as a whole.
As for the structure of the deal, the new ownership group will collectively contribute $36 billion, with the final $20 billion coming in the form of debt financed through JP Morgan Chase Bank. The sale will take Electronic Arts off the stock market and into the hands of private investors, but the pressure of $20 billion in debt is becoming increasingly serious.
This move is called a leveraged buyout because part of the deal is financed with debt. There is a chance that the company will be able to start operating and make a profit. Or it could become overwhelmed by that debt and go bankrupt—which is what happened when private equity firms acquired Toys R Us in 2005 in a $6.6 billion deal that saddled the company with $5 billion in debt.
The retailer filed for bankruptcy in the US and Canada in 2017 after all the money it made was used to pay off that debt. according to the trading platform. The difference here is that Toys R Us was in worse shape than Electronic Arts at the time of the sale and was struggling to compete with online marketplaces like Amazon.
“The $55 billion buyout saddles EA with debt that only makes sense through new revenue streams.”
PitchBook gaming analyst Eric Bellomo told Game Developer that “the results of leveraged buyouts have been mixed,” pointing to the failures of Toys R Us and Joann Fabrics but the success of Hilton and Dell. Silver Lake in particular will be a boon to this endeavor, he said: “Silver Lake brings significant gaming experience with its position in Unity and a solid track record of top-quartile funds. Historically, the firm as a whole has performed as a third-quartile manager.”
However, founder of research and advisory firm DFC Intelligence, David Cole, explained that leveraged buyouts remain “high risk” and often result in “asset sales and short-term cost cutting” in hopes of achieving long-term success. “It all comes down to execution and that remains to be seen,” he added.
Electronic Arts has a significant revenue stream—$7.5 billion in fiscal 2025—that will be important to paying down debt. But the company will likely reprioritize and focus on its most profitable areas, according to New York University School of Business associate professor Joost van Drunen. He told Game Developer that this means potential layoffs and possibly the sale of “dormant IP” such as Command & Conquer.
“The $55 billion buyout saddles EA with debt that only makes sense through new revenue streams — likely sports betting and integrated media businesses,” van Dreunen said in an email. “Going private takes away the quarterly pressure from Wall Street, allowing for more creative freedom. However, this will be followed by restructuring. EA will likely split into sports and non-sports divisions, with some operations potentially moving to Saudi Arabia. For studios, this means freedom from profit demands and greater oversight from investors with geopolitical goals.”
This is stated in the FAQ for Electronic Arts employees, published by the US Securities and Exchange Commission. that there will be no “immediate” changes to jobsteams or day-to-day work—i.e., no “immediate” layoffs. How long does it take for this to happen immediately? That's the question for Electronic Arts employees as the deal's closing date approaches.
Van Drunen said “the cultural shift is starting immediately,” although the closure is months away. “Once a sale is completed, priorities shift overnight to strategically align with the buyer’s goals,” he added. “Expect EA management to quietly reorganize around its sports and online services divisions in anticipation of new ownership. Going private also gives CEO Andrew Wilson time to prove Battlefield 6 could form the basis of a post-merger narrative.”
Possible layoffs and restructuring are “inevitable,” he said, as the company reviews its assets. DFC Intelligence's Cole said the nature of the debt meant it was often followed by cuts along with sales of “non-essential assets”.
“We see EA doubling down on its high-end sports games and live events,” Cole said. “They might try to sell [off other studios and franchises] to pay off the debt. You may see EA looking at some of their smaller franchises/studios.”
Van Drunen agreed. He said the new owners would likely focus on Electronic Arts' sports franchises, which generate huge profits, meaning the rest of the publisher's catalog could face “aggressive 'downsizing' ahead of potential sell-offs.”
Bellomo suggested that mobile games and, of course, Battlefield could shape the future of Electronic Arts. “EA is almost certainly evaluating potential synergies across mobile games, particularly with Scopely, and preparing for the upcoming launch of Battlefield, which will remain a key focus in the coming months,” he said.
Bellomo believes the company's broader strategy is unlikely to change dramatically as Electronic Arts continues to rely on “major cash-generating franchises and stable revenue streams from in-app purchases, microtransactions and similar sources.”
“Saudi Arabia and other investors are adding capital to achieve cultural legitimacy”
Van Drunen noted that this particular leveraged buyout is a little different from others because of Saudi Arabia's involvement.
“Games are the new oil,” van Drunen said. “The Saudi Arabian Public Investment Fund is using it to gain global cultural relevance while diversifying beyond oil. With nearly 60 percent of Saudis, some 21 million people, playing games and the domestic market projected to grow 56 percent to $2.8 billion by 2026, EA represents the jewel in the crown [Saudi Arabia capital] Riyadh's Vision 2030 strategy is to establish itself as a global gaming hub.”
He continued: “This LBO differs from the traditional scenario: rather than cutting debt service costs, Saudi Arabia and other investors are adding capital to achieve cultural legitimacy. They're likely indifferent to short-term profits, viewing EA as a long-term anchor for broader entertainment ambitions. This may temporarily insulate EA from layoffs and creative risk aversion, although the debt will always come due sooner or later.”
Saudi Arabia's investment in the video game industry is part of a broader strategy to acquire this cultural heritage, as the country has already poured billions into the gaming and esports industries through its Public Investment Fund.
This year, the Saudi-owned e-sports and video game company Savvy Games Group has acquired the majority of the video game business of Niantic, the maker of Pokemon Go. for 3.5 billion dollars. Niantic is now managed by Scopely, which was acquired by Savvy Games Group in 2023 for $4.9 billion. Savvy Games is owned by the Public Investment Fund, which has also invested in Nintendo, Take-Two Interactive, Embracer Group and others.
In addition to traditional games, Saudi Arabia is actively investing in e-sports – it owns the ESL FaceIt Group. and the Evo fighting game tournament. This approach has been compared to Saudi Arabia's investment in sports. which Human Rights Watch calls sports washing: “a word to describe countries notorious for human rights abuses that host major sporting events.”
Saudi Arabia has a notoriously poor human rights record. according to Amnesty International. The Saudi government is accused of killing journalist Jamal Khashoggi (allegedly on the orders of Crown Prince and Chairman of the Public Investment Fund Mohammed bin Salman), suppressing freedom of speech, discriminating against women and members of the LGBTQ+ community (LGBTQ+ rights are not recognized or protected by law in Saudi Arabia), and outlawing protests and demonstrations.
All of this adds up to the potential for “more sovereign money in the sandbox,” van Drunen said. “Once state-backed investors start treating games as geopolitical assets, the floodgates will open,” he continued.
“This means bigger budgets, fewer outlets and politics baked into content decisions. For developers, this means deeper pockets but an increased focus on cultural representation. Recent tariffs and barriers to entry into the U.S. for highly skilled talent also present opportunities for markets like Europe to expand their gaming presence. The center of gravity in games is shifting from market dynamics to geopolitical power games.”
