In the world of video gaming, there are few third-party companies as big as Electronic Arts (EA). With Sony and Nintendo doing their development in-house and Microsoft owning big names like Bethesda and Activision-Blizzard, there aren’t a lot of independent third parties left in gaming. You’ve got Capcom and Ubisoft, as well as Sega and Rockstar, but EA is huge. If all they had was the “Madden NFL” series to their name, they’d still be big, but add in “Mass Effect,” “Battlefield, “The Sims” and others- and you have a behemoth. It’s possible that behemoth is about to be bought for a record-breaking sum.
Unlike other recent buyouts where another gaming studio is doing the purchasing, or a holding company, this is shaping up to be a leveraged buyout to take the company private. Reportedly, several different companies are looking to acquire the gaming giant, including the Saudi Arabian owned Public Investment Fund (PIF), and Affinity Partners. The possible buyout discussions are in the realm of $50 billion, which would make it the largest leveraged buyout in Wall Street history. Affinity Partners is run by President Donald Trump’s son-in-law, Jared Kushner.
What this would mean for the structure of EA itself is part of the what happens next question. While they’re far from in trouble, it’s not exactly like the company has been hitting it out of the park lately either. They’ve completely mismanaged Bioware over the last decade, have been routinely criticized for buggy releases of “Battlefield” games, and have been raked over the coals for releasing merely iterative sports titles with obscene amounts of microtransactions.
Of course, it’s not like the PIF has a great track record. The group has also been accused of trying to spread the influence of the Saudi Arabian government through investments in everything from video gaming to golf and other sports. But you wouldn’t know any of this could be negative if you look at EA’s stock which rose 15% on Friday after the news was broken by the Wall Street Journal. Of course, this would be a boon to stockholders who could potentially get a nice payout if the purchase goes through and the company goes private, so naturally the price would jump.
UPDATE-
It looks like the purchase is going forward.
