The buyers are committing $36 billion of their own equity (briefly and inexpertly, “equity” is the value of your assets after you deduct anything you owe), including the value of the PIF’s existing investments in EA. They’re making up the rest of the total thanks to a $20 billion loan from JPMorgan Chase Bank. How will they manage that massive debt? According to the Financial Times, who cite unnamed insiders, they’re gambling on the deployment of generative AI tools as a gigantic cost-saving measure.
“The investors are betting that AI-based cost cuts will significantly boost EA’s profits in the coming years, people involved in the transaction told the Financial Times,” the paper wrote (paywall) in their own coverage of the story. The FT elsewhere commented that the acquisition “is a huge bet that artificial intelligence can significantly cut EA’s operating costs, allowing the equity consortium to manage a large debt load on a company that historically carried limited net debt.”
EA can always keep printing money by putting out the same sport games every year, how the fuck did they get into $36 billion debt? I’m not even mad, that’s impressive.
Might as well consider EA dead.
Good?
On paper EA being dead is good, but I’d like it to be dead and without parasites making money off of the corpse.
It’s a zombie, you’re gonna have to try harder.
EA’s output of middling products filled with aggressive microstransactions is about to be bolstered with… heavy use of AI slop?
I’m looking forward to watching this bankruptcy speedrun.
This has got to be some form of vulture capitalism. They will sell off all the IP and physical property, either directly or by spinning off divisions into new companies to sell off. Then sell off any other pieces of the company that they can, and finally they’ll take all that income as bonuses for the new owners and leave the remains of EA with nothing but debt and no option other than to file for bankruptcy. Same thing that was done to companies like Toys-R-Us but on a larger scale.
good, let them fail more.
Well, they’re fucked then
Vibe coding is one thing, but I am curious about the state of using of AI tools to reduce the cost of generating 3D assets, animations, and textures. I assume they are introducing this into Ignite and their other build tools, for more rapid prototyping if nothing else.
What a fantastic plan. Nothing could possibly go wrong.
Not that I bought their games to start, but I can hope this drives others to stop buying their games all just to say fuck you to some of the investors in this.
