Saudi-led group completes $55bn purchase of gaming giant EA

Here is a story making headlines in the economy: Saudi-led group completes $55bn purchase of gaming giant EAImage source, Electronic ArtsImage caption, EA's football titles - from Fifa to EA FC - have sold over 325 million copies since the first release in 1993ByLaura CressTechnology reporterPublished1 hour agoThe sale of gaming giant Electronic Arts (EA) for $55bn (£41bn) to a group of buyers including Saudi Arabia's Public Investment Fund (PIF) has been finalised. The American company is known for making and publishing best-selling games such as EA FC, formerly known as Fifa, The Sims and Mass Effect. The investors, who include Affinity Partners - led by President Donald Trump's son-in-law, Jared Kushner - are taking EA private, meaning all of its public shares will be purchased and it will no longer be traded on a stock exchange.

It is thought to be the largest leveraged buyout in history, meaning a significant part of it is paid for with borrowed money, which the company will have to pay back. This is because as well as the $36bn it has already put into the deal, PIF needs to borrow $20bn from investment bankers JPMorgan to close it, with the business taking on the debt. How paying back this debt will affect EA as a business has been the source of much speculation from journalists and analysts.

Economic Details

Bloomberg's Jason Schreier surmised it could lead to "mass layoffs, more aggressive monetization, and other big cost-cutting measures, external", for one of the industry's biggest companies. Christopher Dring, editor-in-chief and co-founder of the Game Business, said the nature of the buyout, external was also likely to mean "a very hands-on approach from the investment group". "Private equity firms are typically aggressive in their management of companies," he said.

The deal caused concern amongst some fans of EA's massive library of games, particularly as games like The Sims champion inclusivity and LGBT+ relationships. In Saudi Arabia, consensual same-sex sexual conduct can be punishable by death or flogging under interpretations of Sharia law. In protest at the deal to sell EA to the PIF, the advocacy group Players Alliance HQ has asked gamers to petition their local politicians, external and speak out against it.

"Video games are a reflection of culture and people through their storylines, characters and representation," the campaign's website reads. "With the PIF being the majority owner in the potential buyout, there is a large concern that creative decisions could be influenced by these outside factors, leading to themes such as free speech, gender, LGBTQI+ and other aspects of Western politics being reduced or fully censored across major franchises. "Image source, Electronic ArtsImage caption, Communities from EA's games such as The Sims, which aims to champion inclusivity, have started petitions against the dealPIF is a £514bn pot of money used by the government of Saudi Arabia to invest in many different kinds of ventures - such as football club Newcastle United.

Economists are analysing what the news means for the markets.