Saudi Arabia PIF Set to Control Electronic Arts in Major Buyout Holding 93.4%

The gaming industry is bracing for a massive shift as new reports confirm the extent of foreign investment in one of America’s oldest video game publishers. According to recent filings, the Saudi Arabia PIF (Public Investment Fund) is poised to own a commanding majority of Electronic Arts following a massive buyout proposal. This deal, valued at roughly $55 billion, would effectively take the company behind The Sims and Madden NFL private, marking one of the most significant acquisitions in the history of interactive entertainment.

The Breakdown of the EA Acquisition

Details emerging from a filing with a Brazilian antitrust regulator, later reported by the “Wall Street Journal,” paint a clear picture of the new ownership structure. Once the dust settles on the transaction, the Saudi Arabia PIF will hold a staggering 93.4 percent stake in Electronic Arts. This effectively places the future of the publisher firmly under the umbrella of the sovereign wealth fund.

While the Saudi Arabia PIF is the primary player, they are not the only entity involved in this take-private deal. Private equity powerhouse Silver Lake Partners is set to acquire 5.5 percent of the company. Additionally, Affinity Partners, an investment firm run by Jared Kushner, will secure a minority stake of 1.1 percent. The sheer scale of the Saudi investment, however, leaves no doubt about who will hold the keys to the kingdom.

Financial Struggles and Stagnant Growth

The move to take Electronic Arts private comes at a turbulent time for the company. Despite being a titan in the industry, EA has struggled to maintain growth momentum in a post-pandemic market. Financial reports indicate that annual revenues have remained flat over the last three fiscal years, hovering between $7.4 billion and $7.6 billion.

This stagnation has been compounded by the mixed performance of recent blockbuster titles. Reports suggest that high-profile releases like Dragon Age: The Veilguard and EA Sports FC 25 have underperformed against internal expectations. For shareholders, the buyout offers an exit strategy from a stock that has struggled to yield high returns in recent years. A shareholder vote is scheduled for later this month, setting the stage for the deal to close sometime next year.

Concerns Over Creative Control

One of the primary concerns for gamers and industry analysts revolves around creative freedom. With the Saudi Arabia PIF owning over 90 percent of the company, questions naturally arise regarding how much influence the new owners will exert over game development and studio culture.

Electronic Arts has moved quickly to address these fears. Following the initial announcement in September, the publisher issued statements assuring fans that they would maintain creative control over their projects. They emphasized that their player-first values and track record of creative freedom would remain intact despite the change in ownership structure.

However, skepticism remains. The Saudi Arabia PIF is chaired by Crown Prince Mohammed bin Salman, a figure who has drawn international criticism regarding human rights abuses in the region. While the fund has invested in numerous entertainment ventures without publicly dictating creative content so far, a 93.4 percent ownership stake in a publisher as large as EA is unprecedented territory.

The Expanding Gaming Portfolio of the Saudi Arabia PIF

This acquisition is far from the first foray into gaming for the Saudi Arabia PIF. The fund has been aggressively diversifying its portfolio to reduce the kingdom’s reliance on oil revenue, identifying gaming and esports as key growth pillars.

Currently, the Saudi Arabia PIF holds significant stakes in several other major gaming entities, including:

• Nintendo
• Capcom
• Nexon
• The Embracer Group
• Niantic (developers of Pokemon Go)

Unlike the EA deal, these previous investments were generally minority stakes. The move to acquire nearly the entirety of Electronic Arts signals a massive escalation in strategy, moving from passive investor to active owner.

Industry Consolidation Continues

The EA buyout is happening against a backdrop of intense consolidation within the media and entertainment sectors. As streaming services and gaming platforms fight for user attention, major corporations are merging to pool resources and intellectual property.

In this climate, standalone publishers like EA face increasing pressure to find financial backing that can support the skyrocketing costs of AAA game development.

What This Means for Gamers

For the average player booting up Apex Legends or Battlefield, the immediate day-to-day experience is unlikely to change overnight. The current leadership at EA is expected to steer the ship through the transition. However, the long-term implications of the Saudi Arabia PIF ownership are harder to predict.

With the company going private, EA will no longer be beholden to quarterly public earnings calls. This could theoretically allow studios more time to polish games without the pressure of rushing releases to meet fiscal deadlines. Conversely, it places the company’s fate in the hands of a single majority owner rather than a diverse group of shareholders.

As the industry waits for the final shareholder vote, all eyes are on Redwood City. If approved, this deal will reshape the landscape of western game development and solidify the Saudi Arabia PIF as a dominant force in the global gaming market.