The buyers are committing $36 billion of their own equity (briefly and inexpertly, “equity” is the value of your assets after you deduct anything you owe), including the value of the PIF’s existing investments in EA. They’re making up the rest of the total thanks to a $20 billion loan from JPMorgan Chase Bank. How will they manage that massive debt? According to the Financial Times, who cite unnamed insiders, they’re gambling on the deployment of generative AI tools as a gigantic cost-saving measure.
“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,” the paper wrote (paywall) in their own coverage of the story. The FT elsewhere commented that the acquisition “is a huge bet that artificial intelligence can significantly cut EA’s operating costs, allowing the equity consortium to manage a large debt load on a company that historically carried limited net debt.”
So now EA has been acquired and will become a shell of it’s former self.
Ironic.
Has it been more than a shell in the last decade or two?
I hope, by some odd twist of fate, that Maxis is spit back out into its formal glory. Most likely it’ll just kill more good game series.
Hope their IP gets sold to other companies. Would love to see another wing commander in my lifetime.
I have good news and bad news on that front. The good news is that the original wing commander dev is making a spiritual successor to the game. The bad news is that it’s star citizen.
Fuckin oof
For a brief moment, I had hope. Then, poof, it was gone.
Technically, the Wing Commander successor is Squadron 42. Star Citizen is a Freelancer successor.
I understand if this brings you little comfort.
More comfort than before. Thank you, kind internet stranger.
Well now, I’d already basically given up on EA, glad I made the right choice
Maybe private equity will do to EA what they did to Toys’R’Us!
‘We bought you, you owe us money’ is theft with more steps.
In the example of Toys’r’us, it ends up being theft against other creditors, suppliers, workers, etc, who end up not getting paid when it collapses.
In bankruptcies the entity who introduced the debt should be liable for it (the new parent company)
EA Sports It’s in the slop
Has been for many years
Ah so we can see EA do a Kmart. Neat
EA being on the recieving end of what they’ve been doing to others for years
Might as well consider EA dead.
1982:
Good?
As long as someone buys the rights to…half a billion video game franchises EA is sitting on, yes. It is good.
On paper EA being dead is good, but I’d like it to be dead and without parasites making money off of the corpse.
It’s a zombie, you’re gonna have to try harder.
It’s been a rotting corpse for a while now.
Business majors are so incredibly dumb. Why did we as a society decide they were so important?
Not that I bought their games to start, but I can hope this drives others to stop buying their games all just to say fuck you to some of the investors in this.
“The investors are betting that AI-based cost cuts will significantly boost EA’s profits in the coming years"
I’ll take that bet.
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They’re over leveraged on AI so they’re trying to create markets for it, lol. Jesus christ this economy is a ponzi scheme
They’re also betting on people buying this crap. Hopefully they don’t.
EAAI
good, let them fail more.
Just sitting here playing the long game, waiting for EA to finally implode and get sold off for parts so we can finally get a new Command & Conquer.
