Electronic Arts set for Takeover as Gaming Industry Sees Major Consolidation
REDWOOD CITY, Calif. – Electronic Arts (EA), teh video game giant behind franchises like “Madden NFL” and “The Sims,” is poised to be acquired by Saudi Arabia’s Public Investment Fund (PIF) in a deal that signals continued consolidation within the rapidly evolving gaming industry. The move comes after PIF steadily increased its ownership stake in EA,and analysts predict it will bolster the company’s mobile gaming efforts and fuel innovation.
The acquisition reflects a broader trend of major players merging and being acquired, a shift dramatically underscored by Microsoft’s nearly $69 billion purchase of Activision Blizzard in 2023. “When that closed, really nothing was kind of off the table,” said Mike Marok, suggesting the Activision Blizzard deal ”reset the bar for what was possible in the industry.” EA, founded in 1982 by former Apple employee Trip Hawkins, will cease to be a publicly traded company after 36 years, ending a run that began with shares trading at a split-adjusted 52 cents on its first day.
Despite previous attempts to grow in mobile gaming through acquisitions of companies like Codemasters and Glu Mobile, EA has faced challenges in the space. Michael Pachter of Wedbush Securities believes the PIF investment will provide EA with the resources to gain traction in mobile, especially through its connection to Culver City-based Scopely, which recently acquired Niantic’s games portfolio, including “pokémon Go.”
Saudi Arabia’s investment in EA is part of a larger strategy to develop its domestic video game industry, with plans to invest $38 billion in the sector by 2030, according to Bloomberg. “PIF has demonstrated a strong commitment to these sectors, and this partnership will help further drive EA’s long-term growth, while fueling innovation within the industry on a global scale,” stated Turqi Alnowaiser, PIF’s deputy governor and head of international investments.
Analysts also anticipate that the growth of artificial intelligence (AI) technology will substantially impact the industry, as developers seek to leverage AI tools for more efficient production. Pachter characterized the deal as “a good win for EA shareholders” and “a win for consumers,” adding, “They’re a company ripe to be taken over.”
