PESP raises concerns on private equity acquisition of Electronic Arts

This week, it was reported that Electronic Arts (EA) would be taken private in a $55 billion acquisition by private equity firms Silver Lake and Affinity Partners, as well as Saudi Arabia’s Public Investment Fund. The acquisition of EA is set to be the largest-ever leveraged buyout once completed. 

The proposed deal raises a number of serious concerns for both consumers and the 14,500 workers at EA. Reporting by the Financial Timessuggests that EA’s new owners are hoping to slash operating costs and boost profits through the use of artificial intelligence. Already, the video game industry has seen significant layoffs as studios have opted to replace developers with AI. 

The remarkable amount of debt used to finance this mega-deal is more than twice EA’s FY25 revenue. Leveraged buyouts such as this one are a critical driver of economic instability at private equity-owned companies. 56% of large corporate bankruptcies in 2024 were found to have connections to private equity, and large amounts of debt contributed to the recent bankruptcies of well-known consumer brands including Claire’s and Joann’s.

Below is the statement of Sam Garin, spokesperson for the Private Equity Stakeholder Project, regarding the deal:

“Bringing the private equity playbook to one of the largest video game studios is the crossover event no one asked for. Gamers are sick of the increasing monetization of their favorite titles. Game developers are railing against already-grueling conditions in the industry. Introducing a rapacious drive for profits and even more emphasis on AI into this equation will satisfy few outside of investors. 

“EA has come under fire in recent years for its use of controversial in-game paywalls, loot boxes, and other microtransactions. This acquisition could translate into even more live services including subscriptions, microtransactions, and in-game advertising, which already drive a significant proportion of EA’s revenue. Private equity firms often resort to implementing additional fees to drive profits, from junk fees for tenants to elective services in healthcare.

“Even more concerning are the data privacy risks raised by this acquisition. Private equity firms have faced criticism for their use of consumer data, from education technology in public schools to rent-setting real estate software. With millions of gamers playing EA games like Madden and The Sims, EA and its new owners have access to huge amounts of consumer data which could be monetized in any number of ways.

“The recent runaway success of Silksong shows what gamers really want: games infused with the creativity and care of human developers. We hope EA’s new owners will buck the typical private equity playbook and invest in the people who have made its profits possible.”

Silver Lake has also come under fire for its ties to expanded police surveillance and destructive real estate development in Atlanta, with investments in Motorola Solutions and Shadowbox Studios fueling community and environmental opposition.