EA to be bought by Saudi Arabian private equity at 55 billion dollars

The Saudi firm behind LIV Golf and Newcastle United acquires EA, maker of FIFA and Madden, in a massive gaming takeover.

Photo from Millionaire.dream

Would you spend all your money on your favorite video games if your parents let you? Well, Saudi Arabia did. The Saudi Arabian Public Investment Fund (PIF) is set to buy Electronic Arts (EA), the largest sports video company in the world, in a blockbuster deal for 55 billion dollars. 

EA is home to some of the most popular sports games in the world, including FIFA, NBA 2K, NFL Madden, and more. With this business deal, Saudi Arabia seeks not only to have influence but full control over the entertainment company. Further, this game-changing deal brings in many benefits for the future of Saudi Arabia, both economically and socially. 

The purchase of EA is a major plus for Saudi Arabia’s “soft power,” as it reshapes the culture of the nation and diversifies its global image to the rest of the world. To start, the impact of the purchase allows for the expansion of Saudi Arabia’s economy. It’s estimated that 40% of Saudi Arabia’s wealth comes from oil and gas sales. The purchase of EA brings in another powerful source of income. Further, it allows for diversification within their economy, which legitimizes Saudi Arabia as a nation. This development, more importantly, allows Saudi Arabia to cater to a greater population. In a world increasingly defined by technology, this deal becomes more beneficial than ever. 

Beyond the diversification of the economy, Saudi Arabia now has the opportunity to gain full control of the most respected brand within the entertainment industry, which opens the door to even greater economic opportunities for the nation. The deal empowers them to have a say in hardware designs and game development. It gives them true and direct influence over the global world of gaming, allowing EA to exercise automatic power over foreign nations and control the destiny in whatever way benefits them the most.

In addition, the deal provides numerous cultural benefits for Saudi Arabia. Socially, the acquisition of EA, as stated earlier, directly caters to the world dominated heavily by technology and by the influence of the youth. Moreover, buying this company with globally popular games builds a more favorable national persona for the nation. Instead of being defined by oil, politics, and conservative values, this presents Saudi Arabia with a new opportunity to cultivate an image related to entertainment and fun—relating more to the youthful population and the people of tomorrow. People will begin to view Saudi Arabia with a newer, more futuristic, and modern image. This can even inspire new career pathways for the youth, and a stepping stone to more creativity within the world that breaks traditional ways. 

However, despite its many potential benefits, the purchase also has harmful impacts. The controversial image of “sportswashing” can be further amplified by the deal, a perception that the Saudi Arabian government wants to distance away from. Furthermore, many believe that entertainment is a way to cover up the real problems within Saudi Arabia, including gender inequalities and the lack of LGBTQ+ rights. The acquisition of EA appears shallow and fails to resolve the actual societal problems. 

The deal creates economic concerns as well. It may revolve in a massive, and potentially irrevocable debt, if all goes wrong, as reports are suggesting that the signing of this deal could lead to over 20 billion dollars in debt. Many believe that Saudi Arabia is overpaying for something that isn’t sustainable. For example, this deal reflects that EA’s shares are valued to be $210 each, 25% over the current market value.

Saudi Arabia is taking a leap of faith. They are challenging their traditional societal and economic values in pursuit of modernization. More importantly, they’re paving the way for the world of the future.

Henry Orraca-Cecil ‘27