EA goes private while Nintendo is on the up-and-up: August 5-11 gaming news

Hey readers,

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This week, we’ll go deeper on a news story we touched on last week before getting into some quick headlines and new game releases.

Electronic Arts (EA), the company behind Madden, Battlefield, The Sims, and many other franchises that you’re surely familiar with, announced that the $55 billion leveraged buyout of the publisher by an alliance of three business entities is complete as of last week. The company has been delisted from the stock exchange as it turns into a private company, and it takes on $18 billion in debt.

The consortium that now owns EA is made up of Saudi Arabia’s Public Investment Fund (PIF), a private equity firm called Silver Lake, and Jared Kushner’s investment firm Affinity Partners. PIF, Silver Lake, and Affinity Partners now reportedly own 93.4%, 5.5%, and 1.1% of EA, respectively. Before the buyout, PIF already had a 10% stake in EA. It’s the second-largest gaming-related acquisition, only below Microsoft’s $75 billion purchase of Activision Blizzard.

Announced back in September, the acquisition of EA has understandably raised major concerns due to the Saudi Arabian government’s human rights violations and restrictions on civil liberties for its citizens. The Saudi government has been accused of “sportswashing” its reputation with investments and acquisitions in mainstream sports and entertainment institutions, including the establishment of a new golf tour and the infamous Riyadh Comedy Festival.

In the video gaming sphere, Saudi Arabia’s government or other connected entities (particularly Savvy Games Group) made numerous investments or acquisitions, including Pokémon Go owner Scopely, publisher SNK, and the Esports World Cup. It even has smaller stakes in Nintendo, Capcom, and Take-Two.

While it wasn’t explicitly said by EA that layoffs will occur, journalists have read between the lines and concluded that job losses are inevitable. According to Bloomberg reporter Jason Schreier, EA told debt investors that it’ll cut “$700 million in annual costs,” a figure that includes $170 million in “organizational efficiencies.”

Of course, you can interpret that phrase in several ways, but none of the possibilities sound particularly good. Perhaps instead of (or alongside) layoffs, EA will sell off assets and entire studios. It’s hard not to be cynical and not assume that EA won’t be sold for parts after this acquisition.

There’s no official word or concrete evidence that anything will change for EA’s biggest properties under new ownership, but that hasn’t stopped fans from worrying. Franchises like The Sims are known for their inclusivity of different identities, and although creators and players are concerned that such values would be struck out by new management, an official blog post from Sims developers promised that no such changes would occur.

“Our Sims team’s creative control, guided by our values of inclusivity, choice, creativity, community, and play, has not changed,” Sims developers wrote. “These values inspire the decisions we make each and every day as we plan for today, tomorrow, and the future.”

Meanwhile, Trick Weekes, who was a writer for BioWare’s Dragon Age and Mass Effect from 2005 to 2025, expressed their belief that such an ownership will result in “no gay stuff” for future EA titles.

Thanks for joining us this week! Don’t forget to ask me any gaming questions through this form that you want answered in a future issue.

Bye for now,
Chris Compendio