Saudi Arabia Buys EA Games for £44bn

Game Over: Saudi Arabia's Colossal £44bn Move on EA Shakes Global Entertainment

In a landmark deal that eclipses almost every other in entertainment history, a Saudi-led consortium has acquired gaming giant Electronic Arts. The £44 billion leveraged buyout takes the publisher of EA Sports FC and The Sims private, raising profound questions about the future of interactive entertainment, sovereign wealth, and the soft power of video games.

The gaming industry, no stranger to corporate consolidation, has been rocked by a transaction of unprecedented scale. Electronic Arts (EA), the publisher behind some of the world's most recognised digital franchises, has entered a definitive agreement to be taken private. A consortium comprising Saudi Arabia's Public Investment Fund (PIF), US private equity firm Silver Lake, and Jared Kushner's Affinity Partners will acquire the company in a £44 billion (55 billion) all cash deal. This move stands as the largest leveraged buyout in history, signalling a seismic shift in the global entertainment landscape. The transaction dwarfs most others in the sector, second only to Microsoft's colossal £55 billion (69 billion) purchase of Activision Blizzard.

The Power Players Assemble

The trio of investors behind the acquisition represents a formidable convergence of state capital, technological investment savvy, and political influence. Saudi Arabia's PIF, the kingdom's sovereign wealth fund, is the central pillar of the deal. It will roll over its existing 9.9% stake in EA, becoming the majority shareholder upon the deal's completion. The fund is chaired by Crown Prince Mohammed bin Salman, a key architect of the nation's economic diversification strategy and a figure linked to significant human rights controversies. Partnering with the PIF is Silver Lake, a major American private equity firm with over $110 billion in assets and a deep focus on technology investments. Rounding out the consortium is Affinity Partners, the Miami-based firm founded in 2021 by Jared Kushner, son-in-law and former senior adviser to the US President.

A Kingdom's Grand Strategy

Saudi Arabia's interest in gaming is neither new nor subtle. The EA acquisition is the most dramatic step yet in its National Gaming and Esports Strategy, a core component of the ambitious Vision 2030 plan to diversify the kingdom's economy away from oil. The PIF has already injected billions into the sector through its Savvy Games Group, chaired by the Crown Prince himself. This includes acquiring stakes in major publishers like Nintendo, Activision Blizzard, and Take-Two Interactive. The strategy aims to transform Saudi Arabia into a global gaming hub, creating 39,000 jobs and boosting the sector's contribution to GDP to $13.3 billion by 2030. This is not just an economic calculation; it is a play for cultural relevance and influence.

The Rise of 'Gameswashing'

The kingdom's massive spending spree has drawn accusations of "gameswashing." This term describes the use of investments in the popular and culturally powerful video games industry to distract from and sanitise a nation's poor human rights record. Critics point to this strategy as a parallel to similar investments in international sports like golf and football. By embedding itself within beloved global entertainment, the regime seeks to reshape its international image. The acquisition of EA, with its portfolio of mainstream sports titles, is seen by many as the ultimate move in this soft power playbook, placing a cultural touchstone for millions directly under the influence of the Saudi state.

The Deal's Financial Architecture

The transaction is structured as a leveraged buyout (LBO), a financial manoeuvre where a significant amount of borrowed money is used to acquire a company. The consortium is providing approximately £29 billion (36 billion) inequity, which includes the PIF's existing stake. A further £16 billion (20 billion) in debt financing, solely committed by JPMorgan Chase, will fund the remainder of the deal. This places a substantial debt burden directly onto EA's books. Upon completion, expected in the first quarter of the 2027 fiscal year, EA's 36-year run as a publicly traded company will end, and its stock will be delisted. Shareholders are set to receive $210 per share, a 25% premium on the stock's price before the deal was announced.

Meet the Consortium

At the head of the acquisition is Saudi Arabia's Public Investment Fund, one of the world's largest sovereign wealth funds. Its gaming ambitions are channelled through the Savvy Games Group, led by CEO Brian Ward, a veteran with decades of experience at EA, Microsoft, and Activision. Silver Lake, founded in 1999, is a specialist in technology investments, with a portfolio that includes companies like Dell, Airbnb, and China's Ant Group. The firm's co-CEO, Egon Durban, reportedly initiated discussions about the EA deal with Jared Kushner. Kushner's Affinity Partners, though a smaller player, was instrumental in connecting the parties. His firm is overwhelmingly funded by Saudi capital, having received a $2 billion investment from the PIF after he left the White House.

EA's Position in the Market

Electronic Arts is a titan of the industry. In its last fiscal year, the company reported revenues of $7.5 billion, driven by its powerhouse sports franchises. EA Sports FC (formerly FIFA) is a global phenomenon and its Ultimate Team mode is a massive, recurring revenue generator. The publisher also owns hugely popular series like the life-simulation game The Sims, the military shooter Battlefield, and the battle royale hit Apex Legends. Despite its commercial success, EA has often faced criticism from players over its business practices, particularly concerning microtransactions. The company's value, however, lies in its portfolio of iconic intellectual properties and its deeply embedded position in global sports culture.

Concerns Over a Debt-Laden Future

The £16 billion debt load EA will inherit is a significant cause for concern among industry analysts. This financial pressure raises questions about the new owners' strategy for repayment. History provides cautionary tales. The Glazer family's leveraged buyout of Manchester United in 2005 saddled the football club with hundreds of millions in debt. The subsequent interest payments, often exceeding £60 million annually in the early years, diverted funds that could have been invested in the team or facilities. Critics fear a similar fate for EA, where pressure to service the debt could lead to aggressive monetisation, job cuts, and a reduced appetite for creative risk-taking and investment in new games.

The View from the Top

Andrew Wilson, EA's long-serving CEO, will remain in his position following the acquisition. He lauded the deal as a "powerful recognition" of the company's work. In a message to employees, Wilson stated that the company's values and commitment to players would remain unchanged, and that the partnership would accelerate innovation. The deal is, however, personally lucrative for Wilson. For the fiscal year ending in March 2025, his total compensation package reached $30.5 million, largely comprised of stock awards. The buyout at a premium share price represents a significant windfall for the chief executive and other major shareholders.

A Workforce and Community in Limbo

The acquisition has created deep unease among EA's thousands of employees and its vast player base. For developers, the spectre of a private equity buyout often means restructuring and job losses as new owners seek to maximise efficiency and cut costs to service debt. For players, there are fears that beloved franchises will be squeezed for profit, prioritising revenue over creative innovation. The involvement of Saudi Arabia has also sparked a backlash, particularly within the community around The Sims, which has a large and dedicated LGBTQ+ following. The disconnect between the game's inclusive values and the human rights record of the new majority owner is a source of significant tension.

Image Credit -  by King of Hearts, CC BY-SA 3.0, via Wikimedia Commons

Saudi Arabia's Expanding Esports Empire

The EA deal is a strategic move to dominate not just game development but the burgeoning world of esports. Saudi Arabia has invested heavily in competitive gaming, establishing the Esports World Cup in Riyadh with a staggering prize pool of over $70 million. This event is operated by ESL FACEIT Group, another entity owned by Savvy Games Group. Owning EA gives the PIF control over the underlying games that form the foundation of major esports leagues, like EA Sports FC and Apex Legends. This creates powerful synergies, allowing the kingdom to build an integrated ecosystem connecting games, tournaments, and global fanbases.

The Broader Industry Context

The buyout occurs against a backdrop of slowing growth and increased consolidation within the video game market. After a boom during the pandemic, the industry has faced challenges, leading to widespread layoffs and a more cautious investment climate. Some analysts suggest the sale reflects concerns among EA's leadership about the industry's future. For New York University professor Joost van Dreunen, the financial logic of the deal appears irrational on paper. He argues it is primarily about "power, prestige, and staking Saudi Arabia’s claim in American entertainment," a strategic acquisition of soft power rather than a purely financial investment.

What Happens Next?

The deal is not yet final. It must clear regulatory hurdles, including approval from EA's stockholders and a review by the Committee on Foreign Investment in the United States (CFIUS), which assesses national security risks. Jared Kushner's involvement is seen by some as a potential factor in smoothing the deal's passage through Washington. If approved, the long-term impact on EA's creative culture remains unknown. The new owners have pledged to accelerate growth and innovation. However, the realities of a leveraged buyout and the strategic priorities of a sovereign wealth fund may lead to a very different future for the storied publisher, its employees, and the millions who play its games.