A consortium led by the Saudi Arabian Public Investment Fund (PIF) is set to take American videogame giant Electronic Arts (EA) private through what will be the largest leveraged buyout (LBO) in history. The buyers will pay $55 billion for the company, though the deal’s significance is not only derived from its sheer size [1].
The full acquisition of EA represents a continuation of the PIF Gaming and esports Strategy, which is developing as a major part of the wider Saudi Vision 2030, to develop a “diversified, innovative, and world-leading nation” [2]. Since 2022, Mohammed Bin Salman, Crown Prince of Saudi Arabia and chairman of the PIF, has given clear mandate to help his nation become the “world hub” for games and esports [3]. Thereafter, the fund has developed a rich gaming portfolio including full ownership of Scopely and Niantic, a 5% stake of Nintendo, and a 2% stake in Activision Blizzard [4]. Beyond its equity investments, the nation has hosted the Esports World Cup with a record-breaking price pool, and is scheduled to host the upcoming Olympic Esports Games. Construction of an esports and Gaming District is also underway, aiming to attract 10 million visitors per year by 2030. Through this investment philosophy, Saudi Arabia attempts to capture a significant portion of the videogame market, the revenue of which already exceeds $200 billion per year (more than the film and music industry combined), but the PIF forecasts it growing to $300 billion by 2028 [5].
Beyond the short-term, the strategy can be perceived as a bet on technology-driven evolution, as gaming is set to become more interactive with the integration of generative AI [6]. Additionally, with surveys suggesting AI will give people more free time, Saudi Arabia looks to capitalise on growth in revenue across the gaming and esports industries [7]. With the PIF’s vast ownership of intellectual property (IP) and know-how, synergies will fuel already ongoing development. EA is the crown-jewel of this portfolio and holds rights of games such as EA FC, Sims, Madden, and Battlefield.
Widening the scope, capital markets will hope this deal is followed by a surge in M&A activity. Caused by widespread interest hikes, market uncertainty, and regulatory difficulty in recent years, companies have found costs and risks of IPOs, mergers, and acquisitions substantial [8]. However, the tide started to turn in 2025 as a consequence of stabilising markets and lower rates. Examples include the IPO of Klarna at the New York Stock Exchange, which had been postponed for years due to market conditions, and Verisure in Sweden, the biggest European IPO during the past 3 years [9][10]. The EA LBO and these two deals suggest that a revival of M&A might be on the horizon, especially as investment bankers insist on a long pipeline of deals available if the market improves [11].
In modern-day M&A, LBOs are commonly used acquisition methods, for which EA is a perfect target. LBOs are based on using leverage to finance the upfront payment of an enterprise, which is then to be financed by cash-flows from the acquired company [12]. As EA has reliable revenue, stable management, and operates in a non-cyclical industry, there is confidence that future cash-flows will cover the financing [13]. Furthermore, the deal’s debt-ratio of 37% is notably low compared to standard LBOs, meaning less inherent risk [1].
Another aspect of the agreement involves regulatory pushback and corporate relationships. EA is one of America’s most culturally relevant companies, though a thorough debate regarding its acquisition by a sovereign power has yet to transpire. Despite friendly relations between the Gulf-nation and the White House, similar deals with close allies have previously been put under scrutiny. A recent example is the acquisition of U.S Steel by the Japanese firm Nippon Steel, which was blocked at the U.S. federal level for years due to risks associated with foreign firms owning major American companies [14].
A major reason for the deal’s success is the involvement of Affinity Partners, directed and founded by Jared Kushner, son-in-law of President Trump and former White House advisor to the Middle East. He developed strong relations in the region through the advisory position, leading to signing the Abraham Accords in 2020, an agreement aimed at normalising relations between Israel and Arab countries [15]. A year later, Affinity Partners raised billions of dollars through sovereign wealth contributions from several of the Gulf States [16]. In using relations built within the political sphere to achieve business success, and vice-versa, Kushner demonstrates how a growing overlap between business and politics can lead to lucrative externalities. It also brings controversy, as some accuse Kushner of corruption when using political actions to gain personal goodwill in business [17] [18].
The EA deal represents a landmark in the realm of M&A and an intensification of Saudi Arabia’s long game to redefine its economic future. Furthermore, the acquisition showcases a strengthening relationship between the U.S. and Saudi Arabia, in addition to a deepening intersection between politics and business. This marks a new era where money, media, and power converge.
Edited by Olle Olsson Holmquist.
References
[Cover Image] “A Man Playing a Video Game in a Computer”
(https://www.pexels.com/photo/a-man-playing-a-video-game-in-a-computer-9071735/) by Yan Krukau
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[1] “EA Announces Agreement to Be Acquired by PIF, Silver Lake, and Affinity Partners for $55 Billion.” EA Newsroom, October 24, 2025. https://news.ea.com/press-releases/press-releases-details/2025/EA-Announces-Agreement-to-be-Acquired-by-PIF-Silver-Lake-and-Affinity-Partners-for-55-Billion/default.aspx. Accessed October 24, 2025.
[2] “National Gaming and Esports Strategy (English Version).” Vision 2030, n.d. https://www.vision2030.gov.sa/media/svtpwvei/nges_strategy_en.pdf. Accessed November 4, 2025.
[3] “National Gaming and Esports Strategy.” Vision 2030, n.d. https://www.vision2030.gov.sa/en/explore/strategies/national-gaming-and-esports-strategy. Accessed November 4, 2025.
[4] “All the Gaming Companies Saudi Arabia Owns or Has Invested In.” GameSpot, October 23, 2025. https://www.gamespot.com/gallery/all-the-gaming-companies-saudi-arabia-owns-or-has-invested-in/2900-7081/#2. Accessed October 23, 2025.
[5] “How PIF Is Supercharging the New Golden Age of Gaming.” Public Investment Fund (PIF), October 25, 2025. https://www.pif.gov.sa/en/news-and-insights/news-network/2025/how-pif-is-supercharging-the-new-golden-age-of-gaming/. Accessed October 25, 2025.
[6] “AI in Gaming Market Report.” Grand View Research, n.d. https://www.grandviewresearch.com/industry-analysis/ai-gaming-market-report. Accessed November 4, 2025.
[7] “The Future of Free Time.” Lloyds Banking Group, n.d. https://www.lloydsbankinggroup.com/assets/pdfs/media/reports/the-future-of-free-time.pdf. Accessed November 4, 2025.
[8] “Global M&A Industry Trends.” PwC, n.d. https://www.pwc.com/gx/en/services/deals/trends.html. Accessed November 4, 2025.
[9] “Klarna valued at $19bn in debut on Wall Street.” BBC News, October 22, 2025. https://www.bbc.co.uk/news/articles/c749ee2kpvgo. Accessed October 22, 2025.
[10] “European IPO markets show signs of revival.” Financial Times, October 26, 2025. https://www.ft.com/content/3c50f18f-c4ec-46ee-841a-f63425003be6. Accessed October 26, 2025.
[11] “Goldman Sachs Says Deal Outlook Is Good, Timing Is Uncertain.” Reuters, May 29, 2025. https://www.reuters.com/business/finance/goldman-sachs-says-deal-outlook-is-good-timing-is-uncertain-2025-05-29/. Accessed November 4, 2025.
[12] “Leveraged Buyout (LBO).” Corporate Finance Institute (CFI), n.d. https://corporatefinanceinstitute.com/resources/valuation/leveraged-buyout-lbo/. Accessed November 4, 2025.
[13] “Electronic Arts Inc.” Fitch Ratings, April 9, 2025. https://www.fitchratings.com/research/corporate-finance/electronic-arts-inc-09-04-2025. Accessed November 4, 2025.
[14] “Nippon Steel’s Acquisition of U.S. Steel.” IMAA Institute, October 24, 2025. https://imaa-institute.org/blog/nippon-steels-acquisition-of-us-steel/. Accessed October 24, 2025.
[15] “The Double Life of Jared Kushner: Mixing Business with Politics as Emissary for Donald Trump.” Le Monde, October 7, 2025. https://www.lemonde.fr/en/economy/article/2025/10/07/the-double-life-of-jared-kushner-mixing-business-with-politics-as-emissary-for-his-father-in-law-donald-trump_6746194_19.html. Accessed October 25, 2025.
[16] “Jared Kushner’s private equity firm faces inquiry as it fails to return profits” The Guardian, September 25, 2024. https://www.theguardian.com/us-news/2024/sep/25/jared-kushner-affinity-partners-firm-senate-inquiry. Accessed October 23, 2025.
[17] “Newsweek – Jared Kushner’s New Foreign Deals Spark Corruption Accusation.” Congressman Garcia, October 27, 2025. https://robertgarcia.house.gov/media/in-the-news/newsweek-jared-kushners-new-foreign-deals-spark-corruption-accusation. Accessed October 27, 2025.[18] “Former Obama Advisor: Kushner Engaged in ‘Level of Corruption That We’ve Just Never Seen’ with Foreign Relations.” The Hill, October 27, 2025. https://thehill.com/policy/international/4589465-former-obama-advisor-kushner-engaged-in-level-of-corruption-that-weve-just-never-seen-with-foreign-relations/. Accessed October 27, 2025.
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