4 ms·
Because the Saudis leveraged this buyout via a massive loan from JP Morgan, EA's debt is now 10 times higher than it was when it was a publicly traded company:
by krige 2mo ago
Because the Saudis leveraged this buyout via a massive loan from JP Morgan, EA's debt is now 10 times higher than it was when it was a publicly traded company: $2.2b to $22b.
Turns out the notion that they wouldn’t need humans to make games and they would use AI for most things was a pipe dream and firing staff to be profitable with the huge loan didn't work.
Now they are fucked.
Every company that spends money to buy up companies died and goes defunct because they keep failing to realize that they have to keep spending loads of money to make money and it doesn’t just roll in after acquiring IPs. Not even mobile slop or live service can save them anymore.
- neilfrndes 2mo agoBending Spoons seems to be doing fine
- krige 2mo agoI meant in the videogame industry.
- whatever1 2mo agoFuck this corrupt system. You want to buy a company? Bring your own fucking money. Why do we have to pay for this shit?
- hgomersall 2mo agoWhat? This is JP Morgan on the hook for it if the loan goes bad.
- lazide 2mo agoToo big to fail eh? Do you really think if it blows up, the public won’t get sucked in?
- tgv 2mo agoYou'll have to pay for it anyway. Games will get more expensive, there'll be more micro-transactions, etc. The investors as well as JP Morgan want their money back.
- whatever1 2mo agoRealistically EA will never financially recover from this in its current form. Likely they will carve out 1-2 portions of it they can resell and the rest will die.
- zdc1 2mo agoI wouldn't be so quick to assume the capital structure of a company influences its product decisions. Lots of well-funded, publicly traded companies are also screwing their customers for the sake of short-term revenue. Want better games? Find them. Support the smaller studios and indie devs that produce quality, or contribute to a FOSS one.
- whatever1 2mo agoNo the taxpayer is. We paid the subprime mortgage bill. We will pay the private equity leverage bill too.
- eudamoniac 2mo agoFirst of all the banks paid back that loan with interest. Second of all this EA loan is like pennies compared to that. JPM can swallow it easily.