Seems like private game studios are generally better, but who am I kidding, this is EA we are talking about.
Yeah, normally I would celebrate this sort of decision, if it wasn’t for:
- EA
- Saudi investors
- $55bn
Is $55bn low or high?
These buyouts usually end up being done by dropping the buyout amount into the company as debt. So EA now has $55B in debt to pay off. Time for more layoffs!
This is exactly why Microsoft has been laying people off left and right. They went on a spending spree to buy studios, including $75B for Activision Blizzard, and within like two years started closing studios because they had a giant debt on paper
Yep… Truly insane that it’s legal to make a company pay for itself like that. It’s a recipe for anti-competitive practice sauce a main course of destruction of wealth creating capabilities
It’s $30B in debt, but yeah.
I’m gonna need you to explain how the Saudis paying the shareholders of EA creates an equal sized debt the company (now the Saudis) has to repay
I haven’t looked into the specifics of this buyout, but how they usually work is that the company doing the buyout uses a mix of cash on hand and loans from banks (aka debt) to make the purchase. They use the combined pool of money to pay buy the stock from the shareholders and then when they have a controlling stake in the company, they can tell the company “You owe us the amount of debt we just took to buy you,” and since they control the board of the company they can “accept the terms” they’ve just set for themselves.
This is the exact playbook private equity uses to buy middlingly successful companies and just sell off everything for parts to get a return on their investment.
My guess is they’re going to throw out everything that isn’t Battlefield, the Sims, or their sports cash cows. Those are their money makers and they can focus on just recycling them every year and print money. Low effort, maximum profit, just like their other industry, oil.
Maybe they can stop acquiring good studios and turning them into shit.
As someone who had waning hope, down to only a trivkle now, of a new (decent) mass effect or dragon age game… Well, it’s done now.
Let’s be honest, that ship has sailed, years ago. At least now there’s closure
Although indie tools are getting better and better, a spiritual successor is very nice possible
ME? Why? They showed you the level of dogshit they’ll make.
There are only three ME games: the trilogy.
And nothing of value was lost.
$55bn will buy a lot of pride and accomplishment.
Drink two mountain dew if you support Saudi Arabia
Eu…no crab juice?
