Saudi investors buy Electronic Arts for $55 billion
A group of Saudi investors will acquire video game maker Electronic Arts in the largest leveraged buyout in history. The group includes Silver Lake Management and the Saudi Public Investment Fund, which already owns 10% of Electronic Arts. The deal values the California-based company at $55 billion.
California-based Electronic Arts (EA) is known for such iconic video games as The Sims, Battlefield, and EA Sports FC. It is one of the largest video game companies in the US, alongside Roblox, which is valued at nearly $94 billion, and Take-Two Interactive Software, publisher of the Grand Theft Auto series, which has a market capitalisation of $47 billion.
The leveraged buyout of the largest publisher highlights the challenges facing the video game industry, which has struggled to find new avenues for growth in recent years.
Observers’ concerns
According to Bloomberg, one of the largest video game publishers is facing challenges amid a slowdown in the $178 billion industry. Founded in 1982, EA has created successful franchises such as Battlefield, The Sims, and Madden NFL. Hoping to revive interest in the shooter series and strengthen its market position, the company plans to release Battlefield 6 in October.
After heavy spending in the 2010s and a surge in sales during the pandemic, gamers are opting for proven hits over new releases. As a result, EA has carried out three waves of mass layoffs over the past two years, cutting hundreds of employees. The company has closed several studios and cancelled projects, including a game based on Black Panther. These steps have reinforced analysts’ fears that management is looking for ways out of the unstable situation.
Price justification
EA maintains stable revenue thanks to its strong position in the sports games segment. According to analysts at Circana, the publisher’s titles, including Madden NFL, took four spots in last year’s top 10 bestsellers in the US. This result makes the company attractive to private investment funds.
In recent years, EA has reduced the number of new releases and focused on live service games. The online shooter Apex Legends, released in 2019, continues to be regularly updated and consistently generates revenue. In fiscal year 2025, 75% of EA’s revenue came from live services rather than sales of new games.
Analyst Nicholas Lovell believes that EA’s $50 billion valuation may be a peak value. According to him, the industry is shifting from growth ratios to maturity ratios, which reduces market value even when profits are growing. He also noted that the live services model is suitable for leveraged buyouts, as it provides predictable cash flow.
“We are moving away from an era of disruptive new ideas to an era where people spend money over and over again on the same games,” Lovell concluded. Circana Senior Director Matt Piscatella also noted that the gaming console market has reached maturity and is no longer growing.
Following news of the takeover talks, EA shares rose 15%. On Friday, they closed at $193.35, bringing the market capitalisation to $48.4 billion.
Future of video game industry remains uncertain
In 2020, the video game industry’s turnover increased sharply. People spent more time playing games, and companies invested in acquisitions and development, expecting sustained growth. However, many investments did not pay off, leading to a downturn and mass layoffs.
Kyos Co. CEO Naoko Kino said the future of the industry remains uncertain and growth is unlikely. According to her, this business is like gambling and is highly volatile.
MiDiA Research analyst Rhys Elliott predicts industry growth of 4.6% in 2025, in line with inflation. He believes that double-digit growth is now a fantasy.
Saudi Arabia’s aspirations and actions
Saudi Arabia is positioning itself as a video game hub in line with its Vision 2030 strategy. Kingdom’s Council for Economic and Development Affairs, which Deputy Crown Prince Mohammed bin Salman heads, developed the historic vision.
The vision outlines several goals and reform strategies for the kingdom’s long-term economic success. These include reducing subsidies, creating a national wealth fund, opening a fund for private investment through a partial IPO, and reforms in several industries, including tourism and defence.
As part of Vision 2030, three years ago, the kingdom unveiled its National Strategy for the Development of the Gaming and Esports Sector, which aims to create an attractive and competitive ecosystem. The Saudi Esports Federation (SEF) is playing a leading role in the country’s efforts to develop the sector, supporting the industry and strengthening its position in the global esports market. This year, it hosted the EWC World Championship with a prize pool of $70 million.
This article was first published in Russian on 30 September 2025.
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