One of the biggest gaming companies in the world, the US-based Electronic Arts, is about to be taken over by a consortium of buyers that include Saudi Arabia’s Public Investment Fund.
The “blockbuster” $55 billion (£41 billion) takeover is the “latest win” for Saudi Arabia’s Crown Prince Mohammed bin Salman, an avid “video-game fan” who particularly enjoys playing (Microsoft’s) “Call of Duty”, said Bloomberg.
Electronic Arts makes some of the biggest gaming franchises, including “Fifa”, now known as “EA Sports FC”, “The Sims”, “Madden NFL” and “Battlefield”, and the deal is set to be the largest leveraged buyout of a publicly traded company in history.
‘Money-printing machine’
The EA takeover is “part of a push to deepen trade ties” between Saudi Arabia and the US, said Bloomberg. In May, the crown prince promised to “boost investment” in America to “$1 trillion (£745 billion) in the coming years”.
Also involved in the deal is Affinity Partners, a private equity firm run by Donald Trump’s son-in-law Jared Kushner. He was apparently “key” to winning Saudi Arabia’s interest, said the Financial Times. His presence may also “ease the deal’s path” through the Committee of Foreign Investment in the United States, which is responsible for reviewing company transactions involving buyers from abroad.
“It’s not hard to see why EA is an attractive target for private equity,” said GamesHub. The company is a “money-printing machine” with a “low-risk, high-reward” profile.
For Saudi Arabia, this “advance into gaming” is part of its effort “to diversify its investments away from oil”, said The New York Times. Its Public Investment Fund had already committed to spending $38 billion (£28 billion) across the gaming sector by 2030. Riyadh hosted the Esports World Cup over the summer, and will host the first Olympic Esports Games in 2027. The “gaming push is part of a broader bet by the kingdom on sports”, including backing LIV Golf and making major investments in football and mixed martial arts.
‘Gameswashing’ questions
Just as that investment in sports triggered accusations of “sportswashing” – investing in sporting events to “launder” its international reputation and distract the world from its poor human rights record – Saudi is now facing questions about “gameswashing”, said GamesHub.
The Public Investment Fund has already spent billions on equity stakes in Nintendo, Take-Two Interactive and Activision Blizzard and, earlier this year, acquired the gaming division of Niantic, whose titles include “Pokémon Go”. But the EA deal “is by far its most significant soft power move”.
The kingdom’s latest investment in gaming is another win for its ‘soft power’ portfolio
