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.”
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.
Leveraged buyouts are so stupid to me. “Hi, I’d like to buy this company, but since it will be my company, the company needs to have the debt, not me. So if it goes wrong, well, that’s the company’s fault, not mine.” Should be illegal.
It’s like buying a house, and then expecting the house to pay the mortgage.
Business majors are so incredibly dumb. Why did we as a society decide they were so important?
So ToyRUs 2.0 then?
Maybe private equity will do to EA what they did to Toys’R’Us!
samesies!
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.
OMG I played so much M.U.L.E on the C64. Archon and Jumpman, also.
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.
hope they least long enough to release the worst game in history.
The image being so small makes it funnier.
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.
deleted by creator
Maybe private equity will do to EA what they did to Toys’R’Us!
I will gladly take the customers EA loses
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.
Looks like the monopoly on sports video games is ending soon.
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
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
