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 is assuming people will pay money to play AI slop. These companies continue to vastly overestimate the value of AI produced content. It might be passable on like, bags of candy, maybe even occasionally passable on like free webcomics. And low quality website design. Maybe some simple cash grab mobile games that get taken down after a couple weeks due to the obvious scams.
But paid video games? Which theyre already charging absurd prices for? No. This bubble will burst and companies that continue producing actual games will come out ahead. Companies that are foolishly going all in on entirely unproven technology will crumble.
I mean… you’re talking about the company that makes billions of dollars a year on FIFA games, which are already only one step removed from AI slop. I don’t seriously think EA’s customer base will care; the quality of the games made by EA is already low enough that I don’t believe the use of AI will move the needle. And honestly, will anyone care if it’s AI updating the rosters and title to FIFA 26? I guess I feel bad for the working devs putting food on their table, but is that the job that want?
Don’t they not make FIFA anymore because they didn’t want to pay for the license?
FIFA 2026 just came out four days ago, so I’m pretty sure they still make it.
You mean EA Sports FC 26? Which has been stripped of FIFA branding?
Oh I see, you were just being pedantic for no reason.
I really do genuinely believe that AI content is a substantial drop in quality even from minimal effort content. They’d better invest their time moving to a subscription model. And evidently, whatever theyre currently doing isnt working or they wouldnt be in this situation in the first place. So, id say, firing everyone and moving to AI based content is unlikely to save them and I would believe likely to make their situation much worse.
It’s probably AI videos games made by AI for AI to play. People need to do stuff like mining and growing organs, they can’t do anything nice anymore like play games