Saudi Arabia's $55 billion buyout of EA clears its last big hurdle in Europe

Gaming 3 min 80 sources

The largest leveraged buyout in history is nearly done — and the way it's paid for tells you more about EA's future than who now owns it.

Key takeaways

Saudi Arabia's wealth fund is close to final approval to buy EA for $55 billion — the biggest leveraged buyout ever, funded largely by debt loaded onto EA itself.
That debt has to be repaid from EA's own revenue, which sharpens the pressure to monetize players — seen in EA's fresh push to build ads into its biggest games.
Beneath the giant deal, the industry's squeeze continues: Disco Elysium studio ZA/UM is cutting up to 32 jobs, and an AI-driven chip shortage is pushing PC prices up with no end in sight.

The biggest deal in the history of video games is almost across the line. European Union regulators are set to clear Saudi Arabia’s public wealth fund to take Electronic Arts private, a person familiar with the matter told Reuters this week — one of the last approvals standing between EA and new ownership [1][2]. The buyers are Saudi Arabia’s Public Investment Fund, the private-equity firm Silver Lake, and Affinity Partners, the firm run by Jared Kushner [2].

The deal: $55 billion, and it’s borrowed against EA itself

At $55 billion in cash, this is the largest leveraged buyout ever done — bigger than the $45 billion buyout of Texas power company TXU in 2007 [2]. “Leveraged” is the word that matters. The buyers are putting up roughly $36 billion of their own money and borrowing about $20 billion, with the loan committed by JPMorgan [2]. That debt doesn’t sit with the buyers. It gets loaded onto EA. The company — maker of Madden, The Sims, Battlefield, and EA Sports FC — will spend years earning the cash to pay it back. EA shareholders approved the sale in December, with about 99% in favour [2]. After more than 40 years as a public company, EA goes private, with the Saudi fund ending up owning more than 90% [2].

The mechanism is the story. In a leveraged buyout, most of the purchase price is borrowed and secured against the company being bought. The company then services that debt out of its own revenue. It’s a bit like buying a house with a large mortgage — except the house has to earn the mortgage payment.

The debt’s fingerprints: ads everywhere

A company carrying a large loan has to squeeze cash from every surface it can. That is the private-equity playbook, and EA’s recent moves fit it. This week EA’s vice president of advertising, Alexander Dao, called in-game ads a “huge opportunity” and urged studios to design games with ad space built in from the start [3][4]. EA has already built an advertising platform directly into Frostbite, the engine behind its biggest games [3]. One early test — a Lowe’s-sponsored feature in its college football game — drew over a billion ad impressions, Dao said [3]. None of this needs the buyout to explain it: EA just set an $8 billion sales record, months after laying off developers on Battlefield 6 [3]. But debt sharpens the incentive. When a loan has to be repaid on schedule, the pressure to monetize every player, every session, gets harder to resist.

The human cost keeps landing

While the giants change hands, smaller studios keep bleeding. ZA/UM, the UK studio behind the acclaimed role-playing game Disco Elysium, said this week it is laying off up to 32 staff — across every department [5][6]. The trigger: its new game, Zero Parades: For Dead Spies, launched in May to strong reviews but weak sales. “Its commercial performance has not enabled us to sustain a studio of our current size,” the studio wrote [6]. It’s a hard lesson the industry keeps relearning — critical praise doesn’t pay salaries; copies sold do. This is ZA/UM’s second round of cuts after roughly 24 jobs went in 2024, and the studio says it is working with its staff union through the process [5]. Former ZA/UM developers have already spun off several new studios of their own [5].

A cost from outside gaming’s control

Not every squeeze comes from a boardroom. Valve, which runs the PC storefront Steam, warned this week that the memory crisis pricing up PC parts has “no end in sight” [7]. The cause sits outside games entirely: the artificial-intelligence boom is buying up memory chips, graphics cards, and storage in bulk, and gamers are bidding for the leftovers. Retail supply is running three to six months behind bulk supply, a Valve engineer said, and the shortage even capped how many of Valve’s new Steam Machine consoles it could build [7]. Gaming and AI shop from the same shelf — and right now AI is clearing it.

02 · Lesson · why it matters

How a company ends up paying for its own sale

In a leveraged buyout, most of the price is borrowed against the company itself — so the thing being bought is put to work repaying the loan that bought it.

The strange part isn’t who’s buying

A Saudi wealth fund and two private-equity firms are about to own Electronic Arts. That’s the headline. But the number that decides EA’s next few years isn’t $55 billion. It’s the roughly $20 billion in debt that comes with the deal — and where that debt lands.

It doesn’t land on the buyers. It lands on EA.

Buying a house that has to earn its own mortgage

Here’s how a leveraged buyout works, in plain terms. The buyers put up part of the price in cash. The rest they borrow — and the loan is secured against the company they’re buying. Once the deal closes, that loan sits on the company’s books, not the buyers’. The company then pays it back out of its own revenue.

Imagine buying a house with a large mortgage, except the house is expected to earn the monthly payment. If the house is a hit, you keep the surplus and you barely risked your own money. If it stumbles, the payment is still due.

That’s the position EA is now in. The games have to make the loan payments.

The debt quietly becomes the boss

A company with a big loan can’t relax. Every year, before anything else, the interest is due. That reorders what the company cares about. Risky, slow, artful projects look expensive. Anything that reliably pulls cash out of the existing players looks urgent.

Watch what EA is doing. It just set an $8 billion sales record. It laid off developers anyway. And this week its head of advertising called in-game ads a “huge opportunity” and told studios to design games with ad space built in from the start. None of that requires the buyout to explain it — squeezing players is an old habit. But debt is a hard master. It doesn’t ask nicely, and it doesn’t take a quiet year.

You are the cash flow

Now find yourself in this. If you buy the season’s EA Sports FC, spend on card packs, or watch a sponsored billboard load inside a match — that money and that attention are the revenue. And that revenue is what services a loan arranged in Riyadh and on Wall Street.

The fund isn’t really betting on EA the company. It’s betting on you: on the fact that you’ll be back next year for the same franchise, spending in the same way. Your habit is the collateral. The thing that makes the deal safe is that millions of people love these games enough to keep paying.

”The deal” isn’t a fact of nature

It’s easy to hear “$55 billion buyout” as a neutral piece of finance — a number, a transfer, done. But look at who carries the risk. The buyers borrowed rather than paying all cash, which means they put less of their own money on the line. The loan sits on EA. So if the games do well, the buyers keep most of the reward for a smaller stake. If the games falter, it’s EA — its budgets, its staff, its players — that feels the strain of the payments first.

That split isn’t the weather. Someone chose it. The structure of a leveraged buyout decides, in advance, who eats the downside — and it usually isn’t the people who did the borrowing.

The whole picture, held loosely

Zoom out and no one in this is standing above it. The players fund the loan without meaning to. EA’s staff carry the risk they didn’t take on. Even the fund and the bank are just placing a bet on a simple, human thing — that people keep loving Madden and The Sims enough to keep paying for them.

So the next time you hear a beloved studio was “acquired,” the useful question isn’t only who owns it now. It’s how much it now owes — and who, quietly, is expected to pay that back. Often, it’s the people holding the controller. And from any single seat inside this — a player’s, a developer’s, even a banker’s — you can only see a sliver of the whole machine you’re standing in.

03 · Lab · your turn

Structure the Buyout

Borrow against a studio to buy it, then run a good or bad year and feel how the debt forces the squeeze onto players and staff.

04 · Hope · carry this

Ownership of the biggest studios may change hands in Riyadh and on Wall Street, but the craft itself lives in people, not balance sheets — the developers let go by ZA/UM this week are already starting new studios, carrying what they know somewhere the debt can't reach.