In September 2025, the news broke that a consortium of investors led by Saudi Arabia’s Public Investment Fund (PIF) had made an offer to buy Electronic Arts.
The FC Sports giant is being bought for $55 billion by the PIF, Silver Lake, and Affinity Partners, with more than $20 billion in debt financing from US banking behemoth JPMorgan. The deal is set to close by the end of EA’s first quarter of fiscal 2027, aka by June 30, 2026.
It’s the largest leveraged buyout (LBO) in history. In theory, the newly private company will be able to take bigger risks and think in longer terms as a result of not having to answer to shareholders every quarter, but the way EA is being acquired could have troubling implications for the games firm.
An LBO involves an acquisition being partly funded via the acquiring entity taking out a sizeable loan. The debt associated with this loan is then added to the balance sheet of the company that is being acquired.
In the case of Electronic Arts, the company had $1.49 billion in debt as of March 2026; once the deal closes, this figure will grow to north of $20 billion. Over 30% of the deal is being financed through debt.
In a letter to staff, EA stated that its “mission, values, and commitment to players and fans around the world remain unchanged”, but with this much additional debt on its balance sheet, that’s quite hard to believe.
Paying it back
Depending on who you speak to, this debt serves a different function. It can be a means of maximising returns for the entity buying the company, once it eventually sells it. Alternatively, it acts as a form of fiscal discipline. The company now needs to service the debt, leaving little room for anything other than actions that will deliver maximum returns.
“The company needs to focus on creating cash flow,” the managing partner of an investment fund tells GamesIndustry.biz (they have asked to remain anonymous). “Debt disciplines the company to focus on return on capital much more. Debt is actually a pretty good and healthy driver and enforcer of shareholder value, good capital stewardship, and a company’s stewardship. Ultimately, a company’s sole purpose to exist is to create shareholder value.”
For games industry angel investor Nick Button-Brown, himself a veteran of Electronic Arts, the level of debt on the company’s balance sheet going forward is concerning. He argues that EA has “always invested its profits” and that the dividends it pays to shareholders are relatively small compared to the money it brings in.
“If you look at FIFA and FC Sports, that is an amazing game each year,” Button-Brown says. “The infrastructure that they built around it, the mechanics, the gameplay, all of that has been done because, year after year, they’ve invested the profits from the last one into the next one.
“The problem with a leveraged buyout is that from that point on, those profits don’t get reinvested back into the games. They exit to service financing elsewhere. The level of that leverage means a lot of interest each year. It’s cash that’s just sucked out of the business that can’t be reinvested back into making the next generation of products. That level of leverage changes EA’s flexibility in how much they can put into their existing IPs.”
“Those profits don’t get reinvested back into the games. They exit to service financing elsewhere”
Nick Button-Brown
The concern for Button-Brown is that Electronic Arts will have less cash to back new iterations in its blockbuster series. “That lack of investment will have an impact on their future games. You won’t feel it next year, but you will feel it in five years.”
However, our anonymous investment managing partner says that this can be a good thing and argues that “most companies tend to over-invest” in projects.
“If you are not forced to be capital efficient, you will overinvest because capital is plentiful,” they say. “The debt can force you to be more disciplined; there’s an equilibrium where you don’t overinvest and gold-plate things, but you invest enough for the game to be still a good experience. I’d be surprised if the deal really changes the quality of the games.”
Monetisation
One concern among some consumers is that the leveraged buyout will force Electronic Arts to be more aggressive in money-making areas like monetisation. Button-Brown says that he doesn’t think that EA could be “more aggressive” in this area.
“Electronic Arts has been a listed company for a long time, so profit focus has been massive,” he says. “I don’t see that shifting hugely. In any acquisition, a set amount will be set aside for cost savings. They’ll have a number set aside for the people they’re going to get rid of. That will definitely happen. Certain parts of the business – the parts that are less profitable – will be reduced and closed down.
“There will be some specific cost savings, but I don’t think it will change the character of EA into a massively more monetising company than it already is. It’s very good at monetising or very bad at monetising, depending on which side of it you’re on. It’s very successful at monetising.”
The other issue facing the Electronic Arts acquisition is that it doesn’t appear to be your usual leveraged buyout. When private equity firms use this mechanism to buy companies, they are buying assets they will later sell, hopefully for a profit.
“In this case, the difficulty is seeing where you can sell it,” Button-Brown says. “EA was already listed at quite a high level at a decent valuation. The only way you can sell it is to one of the big conglomerates, like Apple or Microsoft. So maybe that is a play, they’re fattening it up, ready to sell it onto one of the really, really big companies.”
The Saudi factor could also provide a window into what Electronic Arts will look like after the deal closes. After all, the PIF will reportedly own 93.4% of the company after it is completed.
“The more likely predictor of what’s going to happen is the agenda that the Saudi state or Crown Prince Mohammed bin Salman (MBS) has in terms of what they want to achieve with these trophy assets,” the investment managing partner says. “They will likely prioritise FC Sports as that’s very much a global brand. I imagine that MBS is a big fan of Battlefield. Some of the brands that he likes will receive more attention. You might expect that some things that are less Saudi-culturally compatible, maybe The Sims, would be sold.”
The stated objective of the Saudi Arabian leadership is that they are using these huge acquisitions, like the acquisition of Monopoly Go giant Scopely, to build their own games industry. Selling Electronic Arts would appear to run counter to its growth mission.
The investment managing partner says that “it doesn’t make sense for them to run this as a classic LBO,” while Button-Brown says that there “isn’t always an exit play” when it comes to Saudi money.
The goal
Which brings us to why Saudi Arabia has bought Electronic Arts. Experts, including Video Games Industry Memo’s George Osborn, the author of Power Play: Video Games, Politics and the Battle for Global Influence, argue that this is another attempt by the Saudi state to accrue soft power, as well as acquire a great deal of video game franchises, audiences and revenue.
Osborn points to problems that Saudi Arabia has faced in the world of sport; not only has it turned out to be hugely unprofitable, but the country has faced obstacles “in turning traditional sports into a soft power asset for its purposes”. This includes the LIV Golf tournament’s failure and its inability to own more than one major football club following the PIF’s acquisition of Newcastle United.
“Buying EA overcomes this problem in two ways,” Osborn says. “The PIF has bought a business that will deliver digital sports into the bloodstream of the state’s esports strategy. EA Sports FC, Madden NFL, College Football, and the Formula 1 series have all supported esports competitions already. Bringing them into the fold means it is much easier to turn them into centrepieces of the Esports World Cup and the forthcoming Esports Nations Cup, adding some prestige and recognisably ‘sporty’ games for traditional media to get to grips with.
“Arguably, though, the more important impact is how it allows Saudi Arabia to quietly project its soft power across the digital side of the sporting world.”
“By buying EA, Saudi Arabia can quietly tie itself into this enormously interconnected digital ecosystem”
George Osborn
For example, EA promotes titles like EA Sports FC, Madden, College Football, and F1 by “leaning into” the huge digital followings of real-life players. Osborn thinks that this will ultimately be a tool to project Saudi soft power.
“By buying EA, Saudi Arabia can quietly tie itself into this enormously interconnected digital ecosystem to project its influence,” he says. “And while it is unlikely to do something as gauche as trying to put a Saudi Pro League player on the front of EA Sports FC, it has already shown its willingness to fuse digital sporting reach with its real-world assets. Cristiano Ronaldo handed out the Esports World Cup trophy last year as an official ambassador of the tournament, while the branding of the Saudi-owned Fatal Fury fighting series was used to promote a May 2025 professional boxing match hosted in Times Square. Securing this deal well before Saudi Arabia hosts the 2034 football World Cup feels resonant, even with EA FC’s beef with the tournament’s organiser, FIFA.”
In other words, EA is the perfect target for Saudi Arabia in achieving its goals, stated and otherwise.
“EA provides economic value to Saudi Arabia, strengthens its esports strategy and provides it access to immense digital media reach into the wider sporting world,” Osborne concludes.
“The question is whether it can carefully translate this reach into influence, without damaging or compromising the relationships EA has built with the wider sporting world.”
