Electronic Arts $55 billion dollar acquisition could mark the biggest leveraged buyout in history and usher in a new phase of public companies being bought up by private equity — leading to more uncertainty for Canada’s gaming industry.
Under the terms of a deal announced Monday, a group of three buyers will pay the company’s stockholders $210 per share.
The purchasers include private equity firm Silver Lake Partners, Saudi Arabia’s sovereign wealth fund PIF and Affinity Partners. Affinity Partners is a private equity firm run by U.S. President Donald Trump’s son-in-law, Jared Kushner.
Electronic Arts, the maker of video games like Madden NFL, Battlefield, and The Sims, has Canadian roots, having purchased Burnaby-based game developer Distinctive Software in 1991 and renamed it to Electronic Arts Canada.
Now known as EA Vancouver, that studio went on to develop some of the company’s largest franchises, and boasts around 2,400 employees in the Lower Mainland. The flagship Vancouver team is known for producing the EA Sports FC soccer games and NHL hockey games.
“We are entering a new era of opportunity,” EA CEO Andrew Wilson wrote to employees in a memo on Monday.
“This is one of the largest and most significant investments ever made in the entertainment industry. Our new partners bring deep experience across sports, gaming, and entertainment. They are committed with conviction to EA – they believe in our people, our leadership, and the long-term vision we are now building together.”
But the deal, expected to close in the first quarter of fiscal 2027, also sparks uncertainty for workers in an industry that has already faced multiple rounds of layoffs in a downturn since the pandemic.
Bradly Shankar, gaming editor at tech publication MobileSyrup, said the gaming industry has seen major acquisitions before, but none compare to this.
“We’ve seen in the gaming space, publicly traded companies buying one another … but this is a private equity investor group taking over EA — so that was something that we haven’t seen and certainly [not] to this scale before,” he said.
“There’s a lot of big EA titles that are being made in Canada. So that’s one of the big question marks surrounding this deal — how will those titles be affected?”
After being taken private, formerly public companies often undergo extensive cost-cutting that can include layoffs.
There has been no indication that will be the case with EA, though the company is taking on around $20 billion dollars in debt for the deal.
After cutting five per cent of its workforce in 2024, EA ended March with 14,500 employees and then laid off several hundred people in May.
EA did not respond to a CBC News request for comment.
Saudi Arabia’s increasing investment
The acquisition by PIF, Saudi Arabia’s sovereign wealth fund led by crown prince Mohammed Bin Salman, marks an expansion of Saudi investment into the gaming industry worldwide, according to Shankar.
“Even before this, they had a stake in EA, they have a stake in Nintendo, Capcom, Take-Two Interactive, which is the parent company of Rockstar, which makes Grand Theft Auto, so they obviously have their hand in a lot of pies already,” he said.
“Because they’re private, there’s a lot of speculation. When you’re a publicly traded company, you have a lot more accountability in terms of the numbers that you’re putting out and there’s at least a bit more transparency there.”
According to Human Rights Watch, “the PIF has facilitated and benefited directly from serious human rights abuses linked to Crown Prince Mohammed.”
“PIF investments in the United States, the United Kingdom, and elsewhere in the world also serve [as] a powerful tool for Saudi Arabia’s soft power and influence,” it said in a November 2024 report on the fund.
Although EA’s video games still have a fervent following, its annual revenues have been stagnant during the past three fiscal years, hovering from $7.4 billion to $7.6 billion.
