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EA May Go Private in $50 Billion Buyout By Multinational Investors

erek

erek

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Private Equity strikes again

"The last time rumors about an EA acquisition were doing the rounds, the company's CEO, Andrew Wilson, was quick to dismiss them and play up EA's successful earnings. Of course, the deal is not yet signed, although an announcement is expected within the next week or two. Theoretically, privatization could help EA streamline company decision-making and remove investor pressure, potentially allowing for more agile moves and interesting game releases. As we discussed late last year, EA isn't the only major publicly traded game studio that is seeking a buyout, with rumors previously spreading about Tencent potentially buying out Ubisoft."

Source: https://www.techpowerup.com/341419/...-50-billion-buyout-by-multinational-investors
 
There's a big, big differences between a privately held company like Valve from the start, and a public company like EA being bought out by private equity. There are many reasons for concern in general and specifically with EA given the titles, studios, licensing, and IP they hold, as well as the potential stakeholders involved in the buyout. In either case, I'm not holding my breath for anything that's going to be a massive improvement in game quality or monetization from the players' perspectives but I'd love to be surprised.
 
A private equity buyout would lead to EA getting cut up into little easily sold pieces. Parts of EA are incredibly valuable if you get rid of the dead weight, and just get back to making games people want to play.
If it was actually being purchased to make money long term by making good games, it could have been a good thing, maybe. I just don't see that happening. About to be even more out of work game developers I think.
 
Gorankar said:
A private equity buyout would lead to EA getting cut up into little easily sold pieces. Parts of EA are incredibly valuable if you get rid of the dead weight, and just get back to making games people want to play.
If it was actually being purchased to make money long term by making good games, it could have been a good thing, maybe. I just don't see that happening. About to be even more out of work game developers I think.
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I would be just fine with EA getting cut up and sold in little bits and pieces. It means something good might be able to come from the IP that way. EA is too big and too stupid to be able to function well as a gaming company. The same thing goes for all the other gaming conglomerations out there.

However, this isn't going to be what happens with EA if bought out by private equity. The result would be the private equity squeezing every last dime out of the IPs EA has which are still worth anything. Eventually all of them will be husks of their current selves to be sold for pennies on the dollar once they aren't worth anything anymore. This is the route of private equity 99.9% of the time.

The IPs with the best chance of survival are the ones which would be sold off early as "dead weight" and that only works if someone buys the IP and actually knows how to make games and make proper use of the IP. They also have to know how to keep a budget under control.

AAA gaming hubris brought EA and a number of other companies to the same spot. They lost the ability to make games and instead were paid to make propaganda. At the same time they lost the ability to use realistic budgets. The result is flop after flop after flop. And don't for a second think this was by accident.
 
i was thinking of buying shares recently because of BF6... too late! :(
 
DukenukemX said:
You don't see AAA games crashing gaming stores.
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That's because stores prepare for AAA game launches, usually, and they fortify their servers based on expected demand.
SmokeRngs said:
I would be just fine with EA getting cut up and sold in little bits and pieces. It means something good might be able to come from the IP
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Unlikely, because devs who just want to make good games wouldn't be able to afford to buy those IPs. They'd either land with other speculators like the infamous embracer group or bought up by another big publisher to be put on their shelf eliminating the competition.
 
SmokeRngs said:
However, this isn't going to be what happens with EA if bought out by private equity. The result would be the private equity squeezing every last dime out of the IPs EA has which are still worth anything. Eventually all of them will be husks of their current selves to be sold for pennies on the dollar once they aren't worth anything anymore. This is the route of private equity 99.9% of the time.
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Let them. If private equity thinks they can just make even more expensive $70 slop then let them try. It isn't like we aren't already decencitized from them.
M76 said:
That's because stores prepare for AAA game launches, usually, and they fortify their servers based on expected demand.
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That just means they didn't expect Silksong to sell so quickly.
Unlikely, because devs who just want to make good games wouldn't be able to afford to buy those IPs. They'd either land with other speculators like the infamous embracer group or bought up by another big publisher to be put on their shelf eliminating the competition.
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Anyone who wants to create a successor to an existing IP will just make a similar IP but with enough changes that it isn't illegal. Mighty No. 9 comes to mind.
 
DukenukemX said:
That just means they didn't expect Silksong to sell so quickly.
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Yes, that's exactly the case, but your post was worded in a way to suggest that AAA games don't crash stores because they don't generate as high of a demand as silksong.
 
I... am cautiously optimistic? Now that they are private they should (keyword) get rid of the ludicrous idea of "infinite growth" that publicly traded companies aim for but as we know is obviously impossible. But then again the new owners can be complete idiots and run the company to the ground. Hopefully they sell the IP's before that happens.
 
M76 said:
Yes, that's exactly the case, but your post was worded in a way to suggest that AAA games don't crash stores because they don't generate as high of a demand as silksong.
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They don't crash servers because they don't get the same demand. Last I heard the game has already sold 5 million copies in just 3 days. About 3.2 million sales are from just Steam. There aren't many AAA games that can reach that level of demand. Donkey Kong Bananza hasn't even sold a million. Mario Kart World sold over 1.5 million.
 
erek said:
remove investor pressure,
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Yes, famously, those private equity buyer of distressed company... not the kind of people that put pressure on what they fully own outright....

I wonder where the idea that modern world public vastly passive (index and what not) that do not even sit on boards, talk and often do not often vote put more pressure on decisions than private equity shark... Giant retirement fund that only think about long term value without having time for details, etc...

PE tend to be way more hands on. Private can remove media attention and pressure coming from society at large / non-investor of course, but that rarely what people want with that type of discourse (they want more of that)
 
Zorachus said:
Hey what happened to that $2 billion Kushner got in the first admin from these terrorists?
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Doing very well, assset under management got near 5 billion on the latest update (abu Dhabi, Qatar, etc... getting in) combined with asset growth, early coverage was really strange about this (seem written by either people that do not realize how long ramp play work 10-14 years before any money going back to investor being espected nowaday), Kushner himself is maybe now a billionaire.
https://www.bloomberg.com/news/arti...s&utm_content=business&embedded-checkout=true
https://www.forbes.com/sites/monica...ts-in-the-middle-east-made-him-a-billionaire/

"got" here is a bit like saying your bank got your money when you invest in one of their pension fund...
 
No sure why people are lighting their hair on fire over this when EA was mostly sucking before this news.

If EA improves then yay for us but if it implodes it could be a good opportunity for another game company to fill that void.
 
TangledThornz said:
No sure why people are lighting their hair on fire over this when EA was mostly sucking before this news.

If EA improves then yay for us but if it implodes it could be a good opportunity for another game company to fill that void.
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I would have thought this would have been unifying news of "who cares what happens with EA" Since I thought they were big evil in respect to games anyways.
 
Yes, EA will be under less pressure to please shareholders with quarterly updates. But it's still going to update its sports games on a yearly basis; there will be incentives for frequent releases in franchises like Battlefield.

Like it or not, we're not going to get back to the "glory days" when EA was stewarding a slew of inventive games — arguably that was in the 1990s, and not even all of it. The realistic best is a blend where EA feels more comfortable taking a few risks while largely continuing business as usual.
 
They destroy over a dozen of literally the best studios to ever exist over 30 years... only to be taken private again and probably carved up by private equity sharks.

The irony and tragedy is just too much. How much different would gaming have been the last 20 years had more of the early big names with unique ideas fought through staying independent? Or if EA had never grown to the proportions it did?
 
Cutting costs by using more AI. If you think this will make better games, I have news for you. I think it will get worse, and many studios will get shut down. EA kind of sucked, but they weren't as bad as Ubisoft. I was hoping BF6 would be a good BF game but I am thinking it may be the last BF game. Hopefully it doesn't get shut down in 3-4 years. Hopefully the final entry in the Jedi Survivor series is well under way. Mass Effect I had low hopes for, so maybe it is best to let that die.
 
DukenukemX said:
Saudi Arabia bought $55B worth of EA.

https://www.polygon.com/ea-electronic-arts-buyout-saudi-arabia-jared-kushner/
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They're already gonna gut it

"EA's New Owner Plans AI Pivot 'To Significantly Cut Operating Costs'— Report
by Cpt.Jank Today, 13:18 Discuss (15 Comments)
After last week's leak of an EA buyout, an official agreement was announced that would see the game studio be bought out by PIF, Silver Lake, and Affinity Partners for a whopping $55 bn, with the current CEO, Andrew Wilson, remaining in his post for the time being. The deal is slated to go into effect in Q1 FY2027, pending shareholder and regulatory approvals. A subsequent report by The Financial Times, however, has provided slightly more details about the future of EA under its new ownership."
 
adios.png
 

“Electronic Arts sells for $55bn to Saudi-led group​



EA's football titles - from Fifa to EA FC - have sold over 325 million copies since the first release in 1993
The sale of gaming giant Electronic Arts (EA) for $55bn (£41bn) to a group of buyers including Saudi Arabia's Public Investment Fund (PIF) has been finalised.”

https://www.bbc.com/news/articles/cjejyl34345o
 
vegeta535 said:
I mean it really can't get any worse then what EA is now. I don't even know when the last time I brought or even played a EA game.
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did you see what happened with LIV Golf? they seem to destroy a lot of good things all for maximizing profits
 
erek said:
did you see what happened with LIV Golf? they seem to destroy a lot of good things all for maximizing profits
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LIV golf is really the total opposite of people trying to maximixe profit, there was a lot of ego, national pride, national PR effort to change the perception of the kingdom, passion for sport going into that venture. Pro sports is virtually never a maximising profit exercise, it is people that already have a lot money doing something they dreamed to do getting involved. Liv Golf had virtually 0% chance to ever turn a profit, outside some extremelly long horizon.

Will see if that group achieve to get big enough in gaming to gain the ability to avoid the sony-steam "30% taxe"
 
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