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.”
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.
Game quality from this company will be absolute dogshit ai slop
Ah so we can see EA do a Kmart. Neat
‘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.
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
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.
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?
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.
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?
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
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.
It’s been a rotting corpse for a while now.
1982:
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?
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.
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
They’re over leveraged on AI so they’re trying to create markets for it, lol. Jesus christ this economy is a ponzi scheme
Kind of a strange bet to make when AI use has been going down in large companies lately. Hope EA goes down as well.
