Saudi Arabia’s PIF leads $55 billion buyout of EA – on route to Vision 2030
The biggest games industry news of the week – and perhaps the year – is that Electronic Arts is set to be taken private by an investor consortium consisting of Saudi Arabia’s Public Investment Fund (PIF), Silver Lake, and Affinity Partners for $55 billion. The transaction, which includes around $20 billion in debt, represents the largest all-cash privatization investment in history and is expected to close in Q1 FY27.
While the deal itself is surprising, it’s no surprise that the PIF would be involved in this deal. The sovereign wealth fund already owns 10% of EA , and has been heavily investing in video game companies since 2021 when it first took minority stakes in EA, Take-Two Interactive, and Activision Blizzard, followed by investments in Japanese and Korean companies such as Nintendo and Nexon in 2022. The deal reiterates the country’s commitment to their Vision 2030 plan and its National Gaming & Esports Strategy, the goals of which include being a global hub for gaming and esports.
EA, for its part, has been one of the strongest and most stable publicly traded video game publishers during a challenging period for the industry, and its sports portfolio continues to stand out across developed and emerging games markets. Niko Partners research shows that sports is the most popular genre in the MENA region, with 33% of PC gamers and 44% of console gamers listing it as their most-played genre. Football games account for 70%–80% of sports game engagement across all platforms. Learn more about our MENA research here
However, while Saudi Arabia’s gamer spending is growing quickly, it is merely 1% of the global games market revenue. The motivation for the deal is something much more strategic and global.
The real motivation may well be to propel EA and Saudi Arabia to strategically advance toward an intersection of esports, real world sports, and video game sports. The deal also creates opportunities for Saudi Arabia to strengthen its console & PC presence and provides EA with an opportunity for synergy with other PIF games entities, particularly Savvy, which also owns Scopely, which also owns Niantic.
Overall, this take-private is very much about aligning gaming and esports alongside entertainment and sports as key diversification pillars for the Saudi economy. The Kingdom has built other sports powerhouses, such as LIV Golf, Saudi Pro League (football, which also was taken private by PIF), ESL/FACEIT Group, the Esports World Cup, and the recent announcement of the Esports Nations Cup. There is an aggressive, concerted effort to build strength in sports, esports, and games as part of Vision 2030.
The EA deal also begs the question of what will come in the future regarding M&A for the global games industry, given ongoing consolidation trends globally, and brings into question the ability for smaller companies to break through to walk among their much larger counterparts.
Contact us for our full thoughts on this deal and what it means for the global games industry.