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.”
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.
As long as someone buys the rights to…half a billion video game franchises EA is sitting on, yes. It is good.
1982:
It’s been a rotting corpse for a while now.
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.
The $20B was printed by JPMorgan Chase bankers so that Jared Kushner and the Saudis could buy EA at 45% off. In return, the saudis promise that they can siphon $20B from fired workers back to the bankers over the next ~10 years.
No? JPMorgam Chase wrote a loan, right? Don’t they win no matter what, so long as the company doesn’t go under? They’re getting interest no?
Yes, it’s a loan so big that normal personal finance “savings and loans” rules don’t really apply. This loan is 3X EA’s entire revenue, 2X Nintendo’s entire revenue. Basically an entire new game-publisher’s worth of money flowed into the gaming industry to exert dictatorial control over EA. JPMorgan Chase just have to make sure that they get their money back from the EA employees they just helped the Saudis buy.
They actually don’t even have to do that. They get the money off the fees and limited interest on the transaction and sell the debt as a “prime” investment to your retirement fund or pension. Leaving the common people to hold the bag while they receive millions in fees and no liability
At this level, maybe not. When you owe the bank $10k and can’t pay it back, it’s your problem. When you owe the bank $20B and can’t pay it back, it’s the bank’s problem.
This is how 2008 happened.
As someone who understands the differences between soccer games I can tell anyone who actually gives a fuck about soccer game quality and is not gacha addicted will confirm current FIFA/FC is utterly shit.
They are probably paying billions in so many teams and players licensing while everything has miniscule improvements or even removing stuff (like Volta game mode).
Every year EA is reporting lesser and lesser profits from the FC series, and doesn’t help that after the first weeks the yearly games start rotting in store shelves while asking 60+ Euro. They make money from the whales spending salaries on player card packs on FUT, and they are quite angry too. Konami is down the corner gaining more and more revenue and users yearly from the FC refugees (not that f2p eFootball is good either).
So now EA has been acquired and will become a shell of it’s former self.
Ironic.
Has it been more than a shell in the last decade or two?
I hope, by some odd twist of fate, that Maxis is spit back out into its formal glory. Most likely it’ll just kill more good game series.
This is a very longwinded way to say “EA will die in a few years”.
“I don’t care who wins. I just want EA to lose.” Star Wars guy
This, they destroyed the art of US video games because it was promoting bad values like gay marriage in The Sims
This will be fun to watch. Maybe not for 14 500 EA employees. I kindly suggest them to leave as soon as possible.
Indeed. I think it would be in their best interest to find work elsewhere before they end up getting laid off at the most inconvenient time.
Beyond that it should be amusing to watch this company go down in flames.
I just uninstalled EA launcher because it’s a fucking cancer and I see this afterwards… If it’s not on Steam it’s piracy material from here on out. Fuck all other launchers/services except GoG, GoG is cool too.
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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.
So ToyRUs 2.0 then?
Maybe private equity will do to EA what they did to Toys’R’Us!
samesies!
Well, they’re fucked then
Business majors are so incredibly dumb. Why did we as a society decide they were so important?
Looks like the monopoly on sports video games is ending soon.
There’s a huge bet that most of us are going to boycott this tomfuckery and do no further business with EA.
Already have.
Unfortunately, will the EA Sports fans and Battlefield fans do the same?
If they hadn’t left already, they never will.
FIFA and Madden have been dog shit iterations for years and years and people keep buying them. Plus Battlefield 6 might actually be good and will test plenty of people (like me) who said “never again” long ago. Luckily I probably won’t actually be tempted because of EA anti cheat and Linux incompatibility.
I was all up for BF6. It releases in two weeks. A bunch of friends are going to get it. I was a bit annoyed that it was the only reason I’d still be using windows11 but I was prepared to wear it. But Jared Kushner, Trump’s son-in-law, fuck.that.noise. No way am I giving that cunt anti-cheat access to my computer.
No… They won’t. But the rest of us free thinkers will. Is it a win? I dunno. I’ll carry that flag tho.
I’ve not bought an EA game in 11+ years and see no reason to start now.
“And then it got worse” isn’t only a valid description of Russian History.
Bye EA. Was nice knowing you.
E: just noticed I’ve been playing EA games since M.U.L.E. on the C-64. Say what you want about the company itself, but they have a long history of making games people want to play. Been playing the entire Battlefield franchise since 1942. Sucks that you can’t play 2142 or even Hardline anymore.
Been playing the entire Battlefield franchise since 1942
Note to readers: 1942 is the name of a game, not the year of release
Hence the italics to denote a title and not a generic date.
Italics can also denote emphasis.
They can. But not in this case.
OMG I played so much M.U.L.E on the C64. Archon and Jumpman, also.
‘We bought you, you owe us money’ is theft with more steps.
In the example of Toys’r’us, it ends up being theft against other creditors, suppliers, workers, etc, who end up not getting paid when it collapses.
In bankruptcies the entity who introduced the debt should be liable for it (the new parent company)
