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.”
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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Haha what a shit headline. But hey, why not blame it on AI? Maybe the suckers getting played won’t realize it’s just the same old PE scam.
So now EA has been acquired and will become a shell of it’s former self.
Ironic.
Looks like the monopoly on sports video games is ending soon.
Ah so we can see EA do a Kmart. Neat
EA being on the recieving end of what they’ve been doing to others for years
Game quality from this company will be absolute dogshit ai slop
This is a very longwinded way to say “EA will die in a few years”.
This, they destroyed the art of US video games because it was promoting bad values like gay marriage in The Sims
“I don’t care who wins. I just want EA to lose.” Star Wars guy
‘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)
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.
I have an hard time believing multiple investment funds can be so clueless.
They aren’t, they will make money stripping EA for parts and once the husk is spent it will be disposed of.
I don’t see how EA can be that valuable when taken apart. Ok they’ve got the sports licenses and a few good IPs, but idk.
Why not? Were you alive 17 years ago? Have you already forgotten how much money Madoff took? How much money was lost to the subprime ponzi?
I was very alive 17 years ago but on a different continent from where whatever you’re describing happened
EA Sports It’s in the slop
I can’t wait for this “investment” to go so down the drain for them…
A lot of what this means is a pivot to the highest yield games. So… more GACHA and other lootbox style gaming. Cheaper assets, more redundancy in levels, shorter and cheaper cut scenes, etc.
But this is normal operating procedure in a bust-out style business model. EA’s going to be boiled down and stripped just like so many prior studios, from THQ to Bioware.
Can’t wait to watch EA scrape by with Gacha games while SE Asia game companies destroy them with their Gacha games.
What SE Asia companies have any success with gacha? Most of them are Japanese, Korean and China.
Oh, that’s not going to be a problem. We’re just going to firewall off all the SE Asian companies with tariffs and sanctions.
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.
As long as someone buys the rights to…half a billion video game franchises EA is sitting on, yes. It is good.
It’s a zombie, you’re gonna have to try harder.
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.
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).
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.
