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EA Announces Agreement to be Acquired by PIF, Silver Lake, and Affinity Partners
- Blackthorn 1y agoEA about to get Toys R Us'd. It should be illegal to be able to put the debt from a leveraged buyout on the company's balance sheet.
- dehrmann 1y agoAt some point, the debt buyers will (or should) balk over the track record of this debt, or the company has enough collateral that they're happy either way.
- WorldMaker 1y agoThe debt buyers are the same people that created that debt (the people doing the LBO in the first place). They force the company they just bought to pay them loan terms they set for the privilege of buying the company they just bought. That's why LBOs are pretty much a corporate Ponzi scheme. It's just too bad it is a currently legal Ponzi scheme. It might be nice to have legislation to prevent it.
- dehrmann 1y ago> The debt buyers are the same people that created that debt (the people doing the LBO in the first place) Sometimes, but not always. I did a quick search on who it is for EA, but didn't find anything. > They force the company they just bought to pay them loan terms they set for the privilege of buying the company they just bought. If the buyers are also the lenders, yes. > That's why LBOs are pretty much a corporate Ponzi scheme. It's not a Ponzi scheme because it's not multi-level and no one's left holding the bag. In the case of buyers also lending, there isn't even a sucker in the deal. If the company goes bankrupt, it either goes into chapter 13 bankruptcy, restructures debt (that the owners are paying?!), then continues doing business, or it goes into chapter 7 bankruptcy, liquidates, and pays debt holders with assets that are sold off. If you bought it and this is your goal, it seems easier to buy the company and immediately sell off its assets. Why bother with the hassle of LBO if the company is worth more dead than alive? Holding the debt is actually a sign of confidence in the company. With the LBO cases you hear about PE doing, the debt holders can end up holding the bag. It's also not a Ponzi scheme because they're big boys making big boy deals. It's risky debt that's hard to price and everyone knows it. You could argue employees are left holding the bag, but not really, since the company didn't owe them anything beyond a last paycheck. They're affected, but that's not the same. Bondholders actually lose money.
- djhn 1y agoThe brand reputation gets milked while cost cutting measures result in subpar products and services. Growth targets are gone, now you optimise for cutting costs faster than you lose market share. It’s not a Ponzi scheme, it just feels like a scam when consumer brands cash out at your expense (the loyal consumer) and slowly bleed the company dry. You do have to note that this is not a universal feature of PE-backed business. Take for example power tools, where most of the big players are privately held and owned by PE firms. Reputation and customer loyalty are profitable in this line of business, so QA and product development are alive and well.
- dehrmann 1y agoEnshitification is common in public companies, too. It's more a feature of greedy, short-term owners.
- lightedman 1y ago"It's not a Ponzi scheme because it's not multi-level and no one's left holding the bag." Not multi-level YET. I've seen many companies undergo multiple LBOs, which only inflate things and leave someone holding an empty bag at the end. It can become one very, very quickly.
- input_sh 1y agoTranslation: Saudi Arabia (PIF), a private equity firm, and Jared Kushner (Affinity Partners).
- Mistletoe 1y agoI didn’t think EA could get more evil but here we are. I remember when they were the good guys. I’d see that EA logo on my Commodore 64 load up and I knew I was in for something amazing like Archon. https://en.wikipedia.org/wiki/Archon:_The_Light_and_the_Dark https://en.wikipedia.org/wiki/Archon:_The_Light_and_the_Dark
- throaway1988 1y agothe dark legacy of cashing out
- nicce 1y agoCompany is worth of 50 billion, while everyone hates it these days?
- bayindirh 1y agoBeing worthy doesn't mean they are doing good things. It only shows that their business model is creating value for the people who matters to the detriment of others.
- nicce 1y agoYeah, the point is that you don't have to make good product or even be liked these days. All you need is a forced social inertia.
- dangus 1y agoPeople don’t like to hear it but they make products people want and those products are acceptable enough in quality. The millions of people who play FIFA, Madden, and Battlefield don’t sit around on niche forums bashing EA for not making enough innovative indie-style titles. EA even puts out titles that are legitimately critically acclaimed every once in a while (Split Fiction as a recent example).
- Havoc 1y agoWas it paid for in DLCs?
- Rooster61 1y agoAlthough I'm not optimistic, there's a small chance this might shake up the sorry state of EA Sports. The incessant focus on microtransactions and features that are essentially just sports themed slot machines over actual solid gameplay has kept me far away from those games for a long time. EDIT: I think I might have worded that poorly. I do NOT think a change is going to happen, at least not one for the better, especially considering the actors involved in the buyout. I think it's optimistic to think that it will.
- msie 1y agoYou're kidding, right?
- saghm 1y agoI don't think they are. Quite a lot of EA franchises seem to be struggling to appeal even to their core base lately. The Sims has gone through similar issues with trying to push paid content over quality, with a recent update to allow selectively disabling packs with new content apparently just corrupting the installation and making it impossible to actually run a lot of the time. From what I've read about the most recent Dragon Age game, meddling from EA also caused a lot of late changes in the game's development that ended up influencing the lackluster reception, which in turn was used as rationale for shuttering future development of Dragon Age games. Things really do seem bad enough that clearly something drastic is needed if anything is going to change, For an unhappy fan of one of the many EA franchises, I don't have any trouble imagining that even a major change that's unlikely to produce good still offers more hope than the status quo. If there's a 1% chance that taking EA private will improve things, it still probably is more likely than things improving with the current management.
- Analemma_ 1y agoI think the odds of an acquisition by private equity resulting in fewer microtransactions and slot machine mechanics are indistinguishable from zero. You should probably instead be preparing for them to be amped up five- or ten-fold.
- Daedren 1y ago
- throaway1988 1y agoLol. Well someone at EA saw the writing on the wall. This is going to be a bad acquisition by these vultures.
- mapcars 1y agoWhat other businesses did they buy? What happened to them?
- throaway1988 1y agoi mean the new owners are going to jettison everything that doesn’t make money sand hyper optimize the rest even more. It’s basically the end of EA, even such as it was.
- AlexandrB 1y agoAAA gaming feels so tired (and tiresome) that this news barely registers for me. The last EA game I played was the excellent C&C remaster - and EA's main contribution was getting out of the way of the project. They still own the rights to a ton of legendary IP - SimCity, Command & Conquer, Battlefield, but I don't have illusions that new iterations of that IP will be any good. I know this is probably part of the Saudi strategy of "sportswashing"[1], but I don't really care about EA or their legacy anymore. [1] https://www.eurogamer.net/ea-sports-fc-24-boss-on-sportswashing-engagement-and-gen-z-football-fans https://www.eurogamer.net/ea-sports-fc-24-boss-on-sportswash...
- teeray 1y ago> The last EA game I played was the excellent C&C remaster - and EA's main contribution was getting out of the way I still remember the “Westwood Studios Proudly Presents…” on the RA2 intro cutscene and that pride really shined through. Even the installer for the game was a blast (full-screen, dropped you into a faux game-UX and gave you a military briefing with their kickass soundtrack while the progress bar ran). Modern AAA games lack the soul that games of this time had.
- porridgeraisin 1y ago> soundtrack The tracks in FIFA 14-15 was also so much better than the tracks in today's FIFAs. In every way. They handpicked not-mainstream songs too
- poszlem 1y agoWhich is ironic given the origin of the name, Electronic *Arts* once positioned themselves as a haven for “software artists,” treating games as creative works on par with music and film. Now they feel more like a licensing machine, recycling IP until it’s dry and chasing live-service revenue. The contrast between what the name promised and what the company became is kind of bleak.
- CaptainOfCoit 1y agoThe irony really kicks in when you start to remember all the arguments for how capitalism leads to the best products. Seems we forgot to clarify "best for who?", but it's clear at least shareholders won something.
- TwoFerMaggie 1y agoRIP Bioware. This will probably be the final stage of its long, painful death.
- devjab 1y agoBioware died back in 2007. As I see it this can only be an improvement.
- Thaxll 1y agoMass effect 2, one of the best Bioware game was developed under EA.
- herpdyderp 1y agoMass Effect 2 was a massive spit in the face of everything Mass Effect 1 was.
- swiftcoder 1y agoAnd yet it is widely acclaimed on its own merits. Such is game development
- deleted 1y ago[deleted]
- marcellus23 1y agoYou're right. The sense of wonder and exploration I got playing ME1 was just totally absent in ME2. But it was nonetheless a pretty good game in its own right, and for many people, a game they enjoyed more than the original.
- hs86 1y agoI loved ME1 and was disappointed by ME2 because I loved ME1 so much. I devoured the lore, every codex entry, and even the long elevator rides where you had to listen to news reports about your earlier actions. The world-building was so much better, and all of this was reduced to a minimum in ME2. ME1 was an epic space RPG with action elements, while ME2 was an action game built around a collection of crew side stories with lighter RPG elements.
- deleted 1y ago[deleted]
- paxys 1y agoFor the FIFA series basically.
- tibbydudeza 1y agoGood riddance.
- tibbydudeza 1y agoFinal stage to AI slop games.
- nerdjon 1y agoI am finding myself having some conflicted feelings on this. First, I absolutely hate who is buying them. Especially as a huge Bioware fan with a Mass Effect tattoo. That being said, putting aside who is buying them for a moment. I would actually be happy to see more gaming companies going fully private. I feel like the need for constant growth (instead of just sustainability) is what has caused much of the issues in the current gaming market. So not exactly super excited about how exactly this is happening, but I do hope that we can see other gaming companies do it with better sources.
- nemomarx 1y agoA company taking themselves private could be pretty good, but leveraged PE stuff will demand profit to pay down the loan and pretty much always have the same motivation for growth as investors.
- Etheryte 1y agoIf you think private equity will be milder, you're in for a bad surprise. Most of the enshittification you see around you stems from private equity.
- WorldMaker 1y agoYup, many private equity deals ultimately are to break a company up into spare parts (to sell individual IPs/sub-brands to the highest bidder.) The extra debt the buyout saddles the company with is in part to build a bankruptcy case to kick off that spare parts auction.
- fzeroracer 1y agoA company going private is, in general, a good thing because they're less shackled by investors and capital. However this is the rare exception because this is more about oligarchs making a play for total control over the media sphere rather than any sort of financial independence. That said, cornering the entertainment side of things is going to be much harder especially since the people that do this kind of thing have zero clue what a video game even is or how to make a profitable one.
- emptyfile 1y ago[dead]
- viburnum 1y agoSportswashing is coming to video games.
- thiago_fm 1y agoThey basically bought FIFA (now called FC). It's a very simple money-printing machine, with plenty of people addicted to it with its gambling/gache style game. All the other IP barely make any revenue and will likely get even less attention. RIP Bioware.
- DanielHB 1y agoI had who spent 1500 USD in one year on ultimate team. In Brazil, around 2015. That was _quite a lot_ of money in Brazil at the time.
- raincole 1y agoWait until you see how much people spend on mobile gacha! Well we don't need to wait long. I think the history book will say this EA acquisition is the point PC gaming market becomes as predatory as mobile.
- thiago_fm 1y agoI have many friends that spent $10K+. Some see it as an investment as you can flip things. It's a digital market, NFT-esque, sold as a game.
- mohsen1 1y agoI'm just wondering how much more predatory FC (formerly FIFA) can get? I already feels like it's owned by a private equity! Maybe they will limit how many minutes you can play before having to pay more?!
- chuckadams 1y agoFor a moment, I thought you were saying they bought FIFA itself. Which doesn't seem out of the question, FSM knows they're for sale in every other way.
- thiago_fm 1y agoFIFA the game, I guess this comes with the context of it being EA. Maybe this will be part of a bigger acquisition... or maybe they have already acquired everything they could, except that they don't want make FIFA look like a bad saudi organization?
- pavlov 1y agoWith Saudi and Kushner ownership, expect many more video games where Iran is the villain.
- stronglikedan 1y agoart imitates life!
- ksec 1y agoI know a lot of people think FIFA is everything, but in my era it was Pro Evolution Soccer or Winning Eleven. Modern Games also lack the Game and Fun part. They either make something super complex I no longer have the time to dive in, or pay to win.
- red_rech 1y ago> They either make something super complex I no longer have the time to dive in Oh man, it’s often worse than you think. So many games now have a lot of “complexity” the complexity is all really surface level leaving you desiring.
- fred_is_fred 1y ago[flagged]
- beepbopboopp 1y agoI want to start by saying I have no skin in the game here. While not perfect, Saudi has very clearly moved "Westernly" on many ideas, most notably social and economic ones. It can even be argued that their recent moves in that direction have made it near impossible for the other large economy companies to move too far the other way. Th At what point does the narrative about their investments on the larger stage become less pejorative?
- sofixa 1y ago[flagged]
- fred_is_fred 1y agoSadly enough there are many in the US who are actively working to move the US towards the world you painted above.
- frogperson 1y ago[flagged]
- sofixa 1y agoThe USA isn't the only country in the "western world", please stop equating the two. Even for Britain, France, Germany, the countries with the biggest far right/reactionary political groups, where there are legitimate chances for them to end up in power, none of them are religious. Or even that socially reactionary for that matter.
- hollerith 1y agoAlso, even the US is not in danger of becoming a theocracy.
- s5300 1y ago[dead]
- pizzathyme 1y agoLike them or not, EA has been a major force in gaming for over 40 years (I used to work there). They invented the term "Game Producer". Their early vision for promoting Game Designers like hollywood Directors was ahead of its time. They have a hallway lined with gold discs of million seller hit games. They basically created the casual gaming industry (The Sims Division, Pogo, Casual Divisions) in a time when games were mostly marketed to boys. I respect this company a lot, even though they always seem to do things that embitter the gaming community against them. Unfortunately these types of buyouts usually come with layoffs, after a year of tough layoffs in games. I hope anyone who will be affected can land somewhere safe. The campus has a labyrinth with a plaque that's always inspired me: "As in life, the walls are only in your mind."
- mlindner 1y agoExcept the entire idea that games should be promoted like hollywood movies is _exactly_ what precipitated this whole downfall. Games are not movies nor should they be like movies. Personally I hope there are tons of layoffs. The entire industry needs to be rinsed clean and refreshed, especially the US gaming industry.
- falcor84 1y agoWould you mind saying more about this? Why does promoting games as if they were movies is an issue? Is this just about the rising development costs of AAA games, or is there something else here that you're alluding to?
- mlindner 1y agoA movie is something you watch, a game is something you play. It's not there to tell you a grand story. It's there to wrap some good gameplay in some storytelling packaging. A game is closer to a novel than it is to a hollywood movie. The most loved games (high replayability is a key component) often have quite lacking "story" if any story at all. What makes them shine is how they feel to play, even better if they encourage your own imagination to invent your own story. When you try to make a game into a movie the true focus is lost. If your game can only be played "once" (not including tacking-on achievements/side-quests/etc) then your game is a movie and not a game.
- eumenides1 1y agoMy made up history of EA is that EA was acquired because a Saudi princling's Dad got mad at him for becoming a whale for EA. So in order to cut costs at home, he just told PIF to buy EA so he can defraud his money back.
- AndroTux 1y ago"I'm tired of buying FIFA every year. Let's just buy EA once."
- moi2388 1y agoThen I will never buy EA again, because there is no way I will ever support Saudi Arabia in any capacity
- eumenides1 1y agoIs it just me, but PIF owning EA is the next (and gigantic) step in the middle east's sport washing strategy?
- xbar 1y agoThe biggest problem I had with EA was that their client (EA, EA Origin, etc) operated like spyware. What will PIF, Silver Lake and Affinity partners do to monetize such client software, beyond games, that is pre-installed on 1 billion devices?
- gruez 1y ago>What will PIF, Silver Lake and Affinity partners do to monetize such client software, beyond games, that is pre-installed on 1 billion devices? How is this different than something like Broadcom buying VMware? Corporate machines are probably far juicier than a bunch of 18-35 yr olds computers. Not to mention that a wide install base also means if they go rogue it'll be detected even faster.
- CaptainOfCoit 1y ago> Corporate machines are probably far juicier than a bunch of 18-35 yr olds computers. "Jucier" in what context/for what? Say you wanna influence how people feel about social issues, what computer user is "jucier" then? Not saying that that's the plan or whatever, just that the context matters.
- gruez 1y ago>Say you wanna influence how people feel about social issues, what computer user is "jucier" then? How are you going to "influence how people feel about social issues" without being overly obvious? In contrast there's plenty of nefarious stuff you can straightforwardly do on corporate machines: insider trading, corporate espionage, sabotage, PII theft, ransomware, and credit card fraud just to name a few.
- a96 1y agoSpyware isn't a problem with a company. It's a symptom of the company.
- pnathan 1y agoMy chief thought about this deal is that Silver Lake ripped off the Skype employees with a claw back clause. Good luck to the EA workers.
- maximilianburke 1y agoBeing acquired by private equity is a surefire way to recreate the EA Spouse era.
- OptionOfT 1y agoMaybe they'll sell off the C&C IP? One can hope. And maybe that makes that one person realize they still have a backup disk of the source code of Red Alert 2.
- CaptainOfCoit 1y ago> Maybe they'll sell off the C&C IP? Yeah, business-people famously don't like to sit on things that have a 1% chance of being valuable in the future, usually selling them off to smaller entities so the fans of those things can actually enjoy them.
- beardedwizard 1y agoMore consolidation of media by the billionaire class. Wait till they start partisan gaming.
- nabla9 1y agoPIF: Saudi Arabian State fund. Affinity Partners: Jared Kushner.
- imglorp 1y agoAssuming the usual follow the money angle, what's the political play here for Kushner and the White House?
- jihadjihad 1y agoPropaganda?
- forgotoldacc 1y agoTariffs on any game that fails to meet some specific condition that EA does. Pump the stock on EA. Drop stock prices on other companies. Buy them up. Repeat. Plus you can pull a Facebook/YouTube/Tiktok and use it to push impressionable people politically towards you. Media made for viewing is all a state enterprise at this point. Interactive media (games) have been looked over, but it seems that won't be the case anymore.
- WorldMaker 1y agoMost of the money is PIF, and that gets into a lot of accusations of "sportswashing": https://en.wikipedia.org/wiki/Sportswashing https://en.wikipedia.org/wiki/Sportswashing The Saudis through the PIF are heavily invested in entertainment brands and sports to distract from the fossil fuels (and worse) that create most of those investment funds. As to Kushner's-specific role, could just be cynically seen to money itself, as a US-based middleman of the PIF deal trying to take a cut. "Administrators" in these sort of private equity buyouts (leveraged buy outs) can make a lot of fast, stupid cash in a grift that probably should be illegal but still currently is not. (LBOs saddle the company being bought out with a lot of debt to pay the "Administrators" what they think they are worth. That debt often leads to the original company going bankrupt and selling their IP at auction to highest bidder and the "Administrators" also take their cuts of those auctions. It's a corporate ponzi scheme that no matter how many huge companies it takes down like Sears or Little Debbie or MGM or many more we still haven't actually put a law on the books to stop it.)
- byronic 1y agoNot referencing the Saudi Arabia portion here specifically but LBOs as documented in the book Barbarians at the Gate (covers Nabisco/RJR tobacco) gives me basically zero hope for the future of EA. EA was already rabid cost-cutters and RIF specialists, and they won the most hated company award for however many consecutive years for a reason. Giving them crushing debt to go along with their propensity to give large executive bonuses and stomp their workforce is not a good recipe long-term
- ecshafer 1y agoEA won the most hated company award because video game players are dramatic. Charging $5 for a launch DLC is a drop in the bucket compared to the ways that some larger more critical companies can affect your life.
- vunderba 1y agoEA has been a target of scorn for a while because of a laundry list of issues (including pay-to-win schemes, loot boxes, treatment of employees, etc.) which is long enough to warrant its own dedicated wikipedia page. https://en.wikipedia.org/wiki/Criticism_of_Electronic_Arts https://en.wikipedia.org/wiki/Criticism_of_Electronic_Arts
- ecshafer 1y agoEA doing any amount of shenanigans isn't making people sick, killing people, making people homeless or destitute. Their crimes are minor and petty.
- LunaSea 1y agoSo I guess that no other matter can receive attention if some people are homeless in the world?
- msl 1y agoNot so, but if you're to pick one company over all the others as being the most deserving of your ire, EA seems like a rather strange choice compared to, say, Nestlé [1], Chiquita [2], The Coca-Cola Company [3] or Shell [4]. One might even wonder if there isn't something wrong with your priorities. [1] https://en.wikipedia.org/wiki/Controversies_of_Nestl%C3%A9 https://en.wikipedia.org/wiki/Controversies_of_Nestl%C3%A9 [2] https://en.wikipedia.org/wiki/Chiquita#Criticism https://en.wikipedia.org/wiki/Chiquita#Criticism [3] https://en.wikipedia.org/wiki/Criticism_of_Coca-Cola https://en.wikipedia.org/wiki/Criticism_of_Coca-Cola [4] https://en.wikipedia.org/wiki/Shell_plc#Controversies https://en.wikipedia.org/wiki/Shell_plc#Controversies
- pluc 1y agoBetween Ubisoft selling to China and EA selling to Saudis, AAA gaming looks bleak.
- slightwinder 1y agoWhy? Both are probably also buying to participate in the media/culture-war. So it's in their interests to also have some good products to sell. The worst that might happen is that all the good games are now leaning more to Arabian/Chinese culture, instead of US/Europe, which is not even a new development, Asian culture has been quite prominent in Western Countries because of Japan and South Korea, and China has been also growing in the last years. And China has some really funded productions, usually playing in the top of their genre. Though, the cancer of gambling will continue spreading.
- pluc 1y agoI don't know about you but I don't want my entertainment money to finance slave labor, cultural oppression, military invasions or butchering journalists. Could be a Canadian thing.
- slightwinder 1y agoThen you also stay away from US-productions? Japanese Games? UK? Germany? South Korea? And this still has no relation with the quality of the games.
- sph 1y agoAAA gaming has looked bleak for the past 15 years, I still do not know why is it such a guiding star for the video gaming world. It is the artistic equivalent of Henry Ford’s assembly line where risk is low, marketing budget is high, and the result is mediocre and bland slop. AAA gaming is blockbuster cinema. It’s for people that don’t really care about the artistic medium. It’s mass entertainment at the industrial level.
- screye 1y agoWonder how PE intends to transform a company that was already trying every slimy PE trick. [x] - Employees are overworked and underpaid [x] - IP treated as infinite cash cows loaded with micro-transactions [x] - Games turned soulless in pursuit of wide 'rated E' appeal Sports is ~50% of their revenue. I wouldn't be surprised if this is a sports-washing exercise where revenue growths takes a back set to normalizing Saudi Arabia to the new generation.
- hackthemack 1y agoSome discussion pre-announcement from yesterday with 60 comments. https://news.ycombinator.com/item?id=45400478 https://news.ycombinator.com/item?id=45400478
- khalilravanna 1y agoTake a company already known for its cynical “value extraction” approach to games, barely fostering enough life within its doors to squeeze out acceptable versions of games that used to be truly Great from among their vast hoard of IP—take that company and add 20 billion dollars of debt and private equity overlords and I can only assume we get something akin to the blood orgy from Event Horizon but in game company form.
- dfxm12 1y agoPIF also has a controlling stake in SNK (who just released a new fatal fury videogame), and has a close relationship with TKO, especially including Saudi Arabia getting a WrestleMania. MBS is known to love "attitude era" WWE wrestling and this move tells me he was probably also a big fan of FIFA growing up. Of course this is entertainment-washing at the end of the day, but I just find it funny the that MBS is going about it: buying EA the same way I would buy a used copy of NHL 97.
- deleted 1y ago[deleted]
- phkamp 1y agoJust think how many people the new owners can spy on, now that they control the backend-servers ? Bandwidth is the only limit...
- LarsDu88 1y agoVideogamers have fickle tastes that can change on a whim, and the entire dev stack for game development is becoming more accessible and commoditized, creating massive amounts of competition. Even more so when it comes to squeezing beloved franchises out. Multiple franchises have died under EA (Sim City anyone?), and one of the top franchises EA owns basically has morphed into a "Middle East combat simulator" (Battlefield). I'm sure the Saudi investors think this might be one way to get influence over the west, or maybe they just like playing FIFA, but I can see this buyout becoming a big stinking turd investment in the long run.
- Sohcahtoa82 1y ago> Multiple franchises have died under EA (Sim City anyone?) Cities: Skylines managed to fill that gap, but then C:S2 was an utter dud on release. I think part of the problem is that we've reached a point where the players expect each individual citizen to be simulated, with the traffic to match, but doing that creates such a massive demand on CPU power that even a modern monster system will struggle once your city reaches the high 6-digit population. Simulating 100K vehicles in real time isn't easy. Even if you're not rendering them all because of draw distance limitations, you're still running path finding regularly if you want vehicles to be smart and try to bypass traffic jams, not to mention just trying to make them respond to traffic signals and not rear-end each other.
- CaptainOfCoit 1y ago> and one of the top franchises EA owns basically has morphed into a "Middle East combat simulator" (Battlefield). Isn't the latest + previous installation about US VS either China and/or Russia, or some other amalgamation of those?
- bparsons 1y agoEAs customer base has been pretty negative on the state of the product for the last several years. I can't imagine this move will do anything but accelerate the trends driving brand dissatisfaction. Customers feel like they are being treated like ATM machines, while the tens of billions of revenue are clearly not going into new, exciting creative endeavors. I suppose all of this makes sense when you consider that EA is a 45 year old company.
- qwertytyyuu 1y agoOh nice, hopefully this means they can not chase profits as much
- Hamuko 1y agoThis means they need to chase profits even harder. Someone's gotta pay that debt.
- walls 1y agoNothing more American than selling their assets to terrorists.
- Culonavirus 1y agoFinally the beginning of the end of EA. The greedy bastards ruined so many franchises and chased so many fads that their absence will be a net positive. I do feel bad for the devs working there... but them having to find new jobs is genuinely the only negative aspect in all of this. I have very little respect for any company that is only interested in the next couple of financial quarters and in making their shareholders as much money as fast as possible (while all else can go f itself). And that's exactly the kind of company EA was for at least a decade. Good riddance.
- npodbielski 1y agoGive this men a drink!
- guizadillas 1y agoYeah EA has been like this for 3 decades since the deal with Origin Systems to publish their games
- johnnyanmac 1y ago>I do feel bad for the devs working there... but them having to find new jobs is genuinely the only negative aspect in all of this. In this job market, that's a pretty big negative. And EA was one of the biggest employers in the US. This is this industry's equivalent of Wal Mart leaving the market. The damage will be felt for years. I think you're also downplaying the last extinguishing of hope for any non-sportsball IP's to be revived. Those wishing for Need for Speed, Mass Effect, Burnout, Dragon Age, and many many more IP's over the last 40 years aren't just going to say "good riddance".
- kulahan 1y agoI literally cannot imagine why people think being purchased by an incredibly wealthy regime looking to extend goodwill to manage their global image would… destroy you? Like yeah this is definitely a money thing, but to assume day one will be greedy and not part of a longer term strategy makes no sense to me. Edit: honestly I expect the company to significantly improve. It’s almost like assuming a restaurant will fail because Thailand started backing it. Yeah, they’re “foodwashing”, if you will, but the purpose is to spread culture and make their people seem more familiar globally.
- jmuguy 1y agoAm I wrong in reading this will add 20b in debt to EA the company, and not the purchasers? Because it seems like just servicing that debt will immediately put the company in a bad position.
- mdavidn 1y agoThat is how a leveraged buyout works. See: Toys "R" Us.
- hollerith 1y agoIt doesn't matter much whether the purchasers personally hold the debt or the debt is held by EA, which is wholly owned by the purchasers.
- burnt-resistor 1y agoStep 1. Take out a giant loan. Step 2. Buy a company on credit. Step 3. Stick company with the loan used to buy it. Step 4. RIF, cut costs, reduce quality, break contracts, and discontinue goods and services. Step 5. Sell everything of value. Step 6. Send that company into bankruptcy. Step 7. Rinse, lather, and repeat.
- amelius 1y agoNobody fixed that exploit in the law yet?
- mdavidn 1y agoI don't understand why the creditors agree to this.
- leovingi 1y ago1) the creditors package up that debt and then sell it off to the next batch of suckers 2) the creditors are first in line to be reimbursed if the company goes belly up, so they are fine with it as long as the assets the company owns are worth more than the debt
- dehrmann 1y agoFound this: > 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. It halfway makes sense. EA is priced at current game production costs, but if that goes down, it'll be worth more. The other side of that is that someone might be able to vibe code with "make the next iconic video game franchise in the vein of Zelda or Pokemon." If EA's sports license moat is strong enough, this might not be an issue, but otherwise, it feels like that cuts both ways.
- CodingJeebus 1y agoIt’s also not a given that AI will improve the cadence of their workflow to begin with. I could easily see a churn-heavy org incentivizing devs to throw workslop over the fence and offload the responsibility of verification to other teams.
- lofaszvanitt 1y agoSo it is going down the drain then.
- johnnyanmac 1y agoVibe coding absolutely does not work at the scale of an EA Sports game. Even if it could get to a compileable state, there will be loads of performance and memory issues. The kind of code needed for these codebases aren't exactly going to be scraped on Github. And then there's console code rooted in NDA's. Throwing that into an LLM is a great way to be blacklisted as a publisher.
- dehrmann 1y agoI buy that vibe coding doesn't work at that scale, and there will always be an investor that thinks it does (these aren't being led by traditional tech investors) who's willing to pay, thinking there's an opportunity. The NDAs don't matter. If there's an exception for tooling like Github, that'll be enough, and enterprise AI code platforms will all hear the same concern and say they don't retain anything. What does matter is there isn't much training data on programming for modern consoles.
- Maro 1y agoAs someone who works in the Middle East at a large company, I expect that next step will be a small army of current and ex-McKinsey MBAs to arrive at EA to "set strategies", "implement operating models", "run transformation exercises", "track value creation", and so on. On the upside, maybe they will release a new AAA Dilbert game though!
- jaynate 1y ago“The transaction positions EA to accelerate innovation and growth to build the future of entertainment.” Unless some of that cash is staying on the balance sheet, they will NOT be investing in growth and innovation. PE is not what I normally think of when I think of innovation and (non-financially engineered) growth.
- numpad0 1y agoWas anything of value lost? EA was long dead due to its predictable and constant lack of content creation abilities, and Saudi Arabia isn't known for even involvement in great creative contents. Meanwhile, Nintendo Switch 2 is still sold out in some places. This feels more like EA shareholders got an exit than SA gained anything.
- asfs4fsdfadf 1y agoIt's an interesting move because the PE playbook is to buy a company and jack up the prices and cut half the workforce while doubling the workload of the other employees. EA is already widely reviled for this stuff so it will be like getting blood from a stone
- ChoGGi 1y agoGood riddance on having a proper headstone for the EA graveyard of shutdown developers.
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- hermitcrab 1y agoInteresting to see what effect this has on the games. No more strong female characters?
- everdrive 1y agoI'm not sure how to feel about this. EA has already been pretty terrible for years; pushing their origin storefront, pushing microtransaction hell in games, lazy [sport franchise] [current year] releases, etc. I think the last good year for EA was probably in the 2000s. Usually these sorts of acquisitions make the product worse, and EA might get "worse" in some strict sense, but there's not much to lose.
- wing-_-nuts 1y agoWelp, EA was already among the worst publishers out there, I can only imagine things will get exponentially worse being owned by private equity.
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- mielioort 1y agoTons of antisemitism?
- mholm 1y agoInterestingly, this means Saudi Arabia now owns the PGA Tour line of video games.
- manifoldgeo 1y agoThere's a recent book called "Plunder: Private Equity's Plan to Pillage America", and seeing this news makes me want to revisit it. The author outlines the usual tactics used by private equity firms to turn a functioning business into their own short-term profit factory, often driving the business into bankruptcy in the process. EA already has a reputation as a semi-broken company, but things can probably get a lot worse. One method they use is the consolidation of a bunch of small, related businesses. For example, PE firms buy out all of the local veterinary offices in a tri-city area, cut costs, lay off the most qualified vets and replace with less-qualified ones, increase prices for services, and operate a local monopoly. Clearly, that particular tactic is much harder to pull on the massive oligopoly that is the gaming industry, but it was the one that stuck with me from the book. There are more baffling ones like selling off all the company's real estate, making them rent it back at a much higher rate than their current mortgages (which may already have been paid off), and then filter revenues out of the company via "consulting fees" paid to themselves and their friends for this bad advice. The book is a little bit repetitive, and some of the tactics are beyond my grasp, but I'm excited to make a personal bingo card of them and see which ones get used on EA as they drive it into the ground.
- skeeter2020 1y agoI read this book, and it's OK but both repetitive and biased. Surprisingly more "textbook" oriented works on PE are harder to find. Wiley had one but it's about 10 years old. The term "PE" also covers a lot of different models, from the worst 80's-style LBO "greed is good" ones, to honest invest-advise-stay out of the way funds. These modern huge deals almost always seem closer to the former. Having now been very close to two PE buy-outs and a big VC funding event, I think I actually prefer VC. Everyone is very transparent and open about what they are trying to do: pour rocket fuel on a fire and get rich. PE wants it all: big annual cashflow, cut all mid/long term costs (R&D, investment, etc) a juicy multiplier on the sale when they flip it to the next PE fund. Most recently I was at a 15 year old company that was doing 25% YoY ARR growth - amazing right? Well no, we were not covering our debt servicing from the most recent PE purchase, so had to cut everywhere and had a hiring freeze. You couldn't get any support to build for the next decade, because funds don't last that long and you don't want to be selling a company in the middle of a project that isn't generating revenues this year. It all makes me mad, sad and very tired.
- dvh 1y agoThat is cost of 300x GTA IV or 100x cyberpunk 2077 games. Wouldn't it be more cost effective to just fund 300 new studios?
- purpleflame1257 1y agoThat's the difference between the VC and PE models. VC, at least in theory, allocated capital to new ideas. PE squeezes "efficiency" out of what exists.
- isk517 1y agoThe value is probably all in the licenses that EA has. Why start studios when you only need 3 or 4 to produce yearly updates to Madden, FIFA, NHL, and PGA.
- BatteryMountain 1y agoSpidey senses tingling: so they have access to a huge install base (millions of kids/teenagers/adult gamers), often times with rootkits/spyware on kernel level (anti cheat), often games needs admin mode to even work, with most devices having microphones/webcams, often with high speed fibre connections... What could possibly be the reason for buying EA? Direct view into family life of citizens around the world. Nice way to gather kompromat.