Saudi Arabia's PIF to Take 93% Control of Electronic Arts in $55 Billion Deal

A Seismic Shift: Saudi Arabia Poised to Control 93% of Electronic Arts

In a move that has sent shockwaves through the gaming industry, Saudi Arabia is set to become the dominant force behind Electronic Arts (EA), one of the world's largest video game publishers. What was initially presented as a consortium-led investor buyout of the gaming giant for a staggering $55 billion has revealed a surprisingly concentrated power structure. At the heart of this colossal deal lies the Public Investment Fund (PIF) of Saudi Arabia, which will wield an overwhelming 93% control of EA once the acquisition is finalized.

This isn't a typical partnership. While Silver Lake is set to acquire 5.5% and Affinity Partners, a fund managed by Jared Kushner (son-in-law of former US President Donald Trump), will hold 1.1%, their stakes appear almost secondary. Notably, the Saudis themselves have existing investment ties to these very companies, hinting at a carefully orchestrated acquisition rather than a diverse investor group.

Unpacking the Financial Architecture

Documents filed with Brazil's antitrust regulator, as reported by The Wall Street Journal, shed light on the financial mechanics. The transaction is structured with $36.4 billion funded through equity and a substantial $20 billion through debt. After accounting for existing investments totaling $5.2 billion, the PIF is injecting approximately $29 billion directly into this monumental acquisition. This strategic financial maneuvering clearly positions Saudi Arabia at the helm, with no semblance of a balanced partnership.

The sheer scale of the PIF's investment and its resulting majority control are considered highly unusual in such large-scale fund acquisitions. Typically, these funds play a more peripheral role. The current setup makes the other investors appear more like window dressing, leaving many to question the rationale behind their minimal stakes.

Geopolitical Ripples and Financial Realities

Beyond the balance sheets, this deal is entwined with significant geopolitical discussions. The Financial Times has previously reported on the involvement of Jared Kushner in facilitating the deal's progression, although this is conspicuously absent from official SEC filings. These developments coincide with past high-profile meetings between Saudi Crown Prince Mohammed bin Salman and Donald Trump, where discussions reportedly spanned artificial intelligence, defense, and other critical areas. Trump, at the time, publicly distanced himself from any suggestion of special private relationships, particularly in the context of the controversial disappearance and presumed murder of journalist Jamal Khashoggi.

The financial health of Saudi Arabia also adds another layer of intrigue. Recent reports from The New York Times suggest a potential strain on the kingdom's finances, prompting a divestment from other American companies. The significant debt component of $20 billion underscores the imperative to generate returns. This could translate into a renewed focus on AI as a catalyst for innovation in game development, or a more austere approach involving budget cuts and asset sales. The latter, as suggested by Kotaku, appears to be a more probable outcome.

Uncertain Futures for EA Employees and Studios

The fate of Electronic Arts' vast workforce hangs in the balance. Shareholders are slated to vote on the acquisition later this month, with completion anticipated by mid-2026 should it receive approval. While players might be dreaming of the next installment of FIFA, The Sims, or Apex Legends, the immediate concern for investors is profitability. Internally, the atmosphere is likely to be far more somber, with the prospect of significant layoffs looming. Meanwhile, Wall Street's financial advisors, like Goldman Sachs, are set to profit handsomely, earning an estimated $110 million for their advisory services.

This potential upheaval is not entirely new for EA. The company has been implementing widespread layoffs since 2023, canceling games, and downsizing its workforce. The separation of EA Sports into its own entity occurred two years ago. BioWare, a studio known for its beloved RPGs, experienced a 20% staff reduction and subsequent lawsuits, leading to the transfer of Star Wars: The Old Republic development. This year, EA faced disappointing sales for Dragon Age: The Veilguard, resulting in further cuts at BioWare, including the disbandment of the Veilguard team. Earlier in April, approximately 300 employees were laid off, and the Titanfall series saw cancellations. Consequently, the future trajectory of EA's development and creative output remains shrouded in uncertainty.