The buyers are committing $36 billion of their own equity (briefly and inexpertly, "equity" is the value of your assets after you deduct anything you owe), including the value of the PIF's existing investments in EA. They're making up the rest of the total thanks to a $20 billion loan from JPMorgan Chase Bank. How will they manage that massive debt? According to the Financial Times, who cite unnamed insiders, they're gambling on the deployment of generative AI tools as a gigantic cost-saving measure.

"The investors are betting that AI-based cost cuts will significantly boost EA's profits in the coming years, people involved in the transaction told the Financial Times," the paper wrote (paywall) in their own coverage of the story. The FT elsewhere commented that the acquisition "is a huge bet that artificial intelligence can significantly cut EA's operating costs, allowing the equity consortium to manage a large debt load on a company that historically carried limited net debt."

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[–] 89 points 1 year ago (6 children)

Might as well consider EA dead.

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  • [–] 54 points 1 year ago (6 children)

    EA can always keep printing money by putting out the same sport games every year, how the fuck did they get into $36 billion debt? I’m not even mad, that’s impressive.

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  • [–] 50 points 1 year ago (4 children)

    The $20B was printed by JPMorgan Chase bankers so that Jared Kushner and the Saudis could buy EA at 45% off. In return, the saudis promise that they can siphon $20B from fired workers back to the bankers over the next ~10 years.

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  • [–] 2 points 1 year ago (3 children)

    No? JPMorgam Chase wrote a loan, right? Don’t they win no matter what, so long as the company doesn’t go under? They’re getting interest no?

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  • [–] 24 points 1 year ago (1 child)

    Yes, it's a loan so big that normal personal finance "savings and loans" rules don't really apply. This loan is 3X EA's entire revenue, 2X Nintendo's entire revenue. Basically an entire new game-publisher's worth of money flowed into the gaming industry to exert dictatorial control over EA. JPMorgan Chase just have to make sure that they get their money back from the EA employees they just helped the Saudis buy.

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  • [–] 5 points 1 year ago

    They actually don't even have to do that. They get the money off the fees and limited interest on the transaction and sell the debt as a "prime" investment to your retirement fund or pension. Leaving the common people to hold the bag while they receive millions in fees and no liability

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  • [–] 1 point 1 year ago*

    As someone who understands the differences between soccer games I can tell anyone who actually gives a fuck about soccer game quality and is not gacha addicted will confirm current FIFA/FC is utterly shit.

    They are probably paying billions in so many teams and players licensing while everything has miniscule improvements or even removing stuff (like Volta game mode).

    Every year EA is reporting lesser and lesser profits from the FC series, and doesn't help that after the first weeks the yearly games start rotting in store shelves while asking 60+ Euro. They make money from the whales spending salaries on player card packs on FUT, and they are quite angry too. Konami is down the corner gaining more and more revenue and users yearly from the FC refugees (not that f2p eFootball is good either).

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  • [–] 49 points 1 year ago (2 children)

    This is a very longwinded way to say "EA will die in a few years".

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  • [–] 31 points 1 year ago

    EA's output of middling products filled with aggressive microstransactions is about to be bolstered with.. heavy use of AI slop?

    I'm looking forward to watching this bankruptcy speedrun.

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  • [–] 26 points 1 year ago (4 children)

    I can't wait for this "investment" to go so down the drain for them...

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  • [–] 15 points 1 year ago (3 children)

    A lot of what this means is a pivot to the highest yield games. So... more GACHA and other lootbox style gaming. Cheaper assets, more redundancy in levels, shorter and cheaper cut scenes, etc.

    But this is normal operating procedure in a bust-out style business model. EA's going to be boiled down and stripped just like so many prior studios, from THQ to Bioware.

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  • [–] 5 points 1 year ago (2 children)

    Can't wait to watch EA scrape by with Gacha games while SE Asia game companies destroy them with their Gacha games.

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  • [–] 22 points 1 year ago (2 children)

    So now EA has been acquired and will become a shell of it's former self.

    Ironic.

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  • [–] 21 points 1 year ago

    Well, they're fucked then

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  • [–] 20 points 1 year ago (1 child)

    This will be fun to watch. Maybe not for 14 500 EA employees. I kindly suggest them to leave as soon as possible.

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  • [–] 8 points 1 year ago

    Indeed. I think it would be in their best interest to find work elsewhere before they end up getting laid off at the most inconvenient time.

    Beyond that it should be amusing to watch this company go down in flames.

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  • [–] 20 points 1 year ago (3 children)

    Leveraged buyouts are so stupid to me. "Hi, I'd like to buy this company, but since it will be my company, the company needs to have the debt, not me. So if it goes wrong, well, that's the company's fault, not mine." Should be illegal.

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  • [–] 8 points 1 year ago (2 children)

    It's like buying a house, and then expecting the house to pay the mortgage.

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  • [–] 1 point 1 year ago (1 child)

    I mean,isn't that what a foreclosure sale is?

    I'm honestly asking. The world of corporate raiding is a foreign and distasteful place to my arts and sciences brain. The world of home buying is also foreign to my arts and sciences brain, but that's cause I leaned more into arts than sciences.

    That being said, you put up 20 grand of your money for a down payment. The bank loans you 200k. You fail to make your payments. Bank forecloses and sells off the property to cover the remaining debt, or at least claw back whatever they can get from it. Would that be so different than what's likely to happen if EA fails to pay JP Morgan back? Is it the liability of Kushner et al vs the liability of a homeowner that is the primary difference?

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  • [–] 1 point 1 year ago

    That's the idea at least, but a corporation is a vastly different thing. A piece of property doesn't have employees, obligations, etc etc. (Well okay, large properties often do, but they aren't hired by the buildings themselves.)

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  • [–] 20 points 1 year ago (1 child)

    EA Sports It's in the slop

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  • [–] 18 points 1 year ago (4 children)

    There's a huge bet that most of us are going to boycott this tomfuckery and do no further business with EA.

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  • [–] [S] 9 points 1 year ago (3 children)

    Already have.

    Unfortunately, will the EA Sports fans and Battlefield fans do the same?

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  • [–] 11 points 1 year ago (1 child)

    If they hadn't left already, they never will.

    FIFA and Madden have been dog shit iterations for years and years and people keep buying them. Plus Battlefield 6 might actually be good and will test plenty of people (like me) who said "never again" long ago. Luckily I probably won't actually be tempted because of EA anti cheat and Linux incompatibility.

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  • [–] 7 points 1 year ago*

    I was all up for BF6. It releases in two weeks. A bunch of friends are going to get it. I was a bit annoyed that it was the only reason I'd still be using windows11 but I was prepared to wear it. But Jared Kushner, Trump's son-in-law, fuck.that.noise. No way am I giving that cunt anti-cheat access to my computer.

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  • [–] 18 points 1 year ago (5 children)

    Hope their IP gets sold to other companies. Would love to see another wing commander in my lifetime.

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  • [–] 26 points 1 year ago (4 children)

    I have good news and bad news on that front. The good news is that the original wing commander dev is making a spiritual successor to the game. The bad news is that it's star citizen.

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  • [–] 2 points 1 year ago (2 children)

    For a brief moment, I had hope. Then, poof, it was gone.

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  • [–] 18 points 1 year ago (5 children)

    This has got to be some form of vulture capitalism. They will sell off all the IP and physical property, either directly or by spinning off divisions into new companies to sell off. Then sell off any other pieces of the company that they can, and finally they'll take all that income as bonuses for the new owners and leave the remains of EA with nothing but debt and no option other than to file for bankruptcy. Same thing that was done to companies like Toys-R-Us but on a larger scale.

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  • [–] 2 points 1 year ago (3 children)

    Thing is, could they even get enough from selling the IP to cover the purchase?

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  • [–] 3 points 1 year ago (2 children)

    Probably not and they have no intention to. They will give themselves bonuses and stock dividends that will eat up all the income from selling the IP (and everything else) and then leave the company with nothing but debt forcing it to declare bankruptcy.

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  • [–] 17 points 1 year ago (1 child)

    'We bought you, you owe us money' is theft with more steps.

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  • [–] 10 points 1 year ago

    In the example of Toys'r'us, it ends up being theft against other creditors, suppliers, workers, etc, who end up not getting paid when it collapses.

    In bankruptcies the entity who introduced the debt should be liable for it (the new parent company)

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  • [–] 14 points 1 year ago (1 child)
  • [–] 13 points 1 year ago

    Business majors are so incredibly dumb. Why did we as a society decide they were so important?

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  • [–] 13 points 1 year ago

    They're over leveraged on AI so they're trying to create markets for it, lol. Jesus christ this economy is a ponzi scheme

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  • [–] 12 points 1 year ago

    Looks like the monopoly on sports video games is ending soon.

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  • [–] 11 points 1 year ago*

    Kind of a strange bet to make when AI use has been going down in large companies lately. Hope EA goes down as well.

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  • [–] 19 points 1 year ago (4 children)

    I have an hard time believing multiple investment funds can be so clueless.

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  • [–] 9 points 1 year ago (1 child)

    What a fantastic plan. Nothing could possibly go wrong.

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  • [–] 9 points 1 year ago* (8 children)

    This is assuming people will pay money to play AI slop. These companies continue to vastly overestimate the value of AI produced content. It might be passable on like, bags of candy, maybe even occasionally passable on like free webcomics. And low quality website design. Maybe some simple cash grab mobile games that get taken down after a couple weeks due to the obvious scams.

    But paid video games? Which theyre already charging absurd prices for? No. This bubble will burst and companies that continue producing actual games will come out ahead. Companies that are foolishly going all in on entirely unproven technology will crumble.

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  • [–] 10 points 1 year ago (6 children)

    I mean... you're talking about the company that makes billions of dollars a year on FIFA games, which are already only one step removed from AI slop. I don't seriously think EA's customer base will care; the quality of the games made by EA is already low enough that I don't believe the use of AI will move the needle. And honestly, will anyone care if it's AI updating the rosters and title to FIFA 26? I guess I feel bad for the working devs putting food on their table, but is that the job that want?

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  • [–] 3 points 1 year ago

    I really do genuinely believe that AI content is a substantial drop in quality even from minimal effort content. They'd better invest their time moving to a subscription model. And evidently, whatever theyre currently doing isnt working or they wouldnt be in this situation in the first place. So, id say, firing everyone and moving to AI based content is unlikely to save them and I would believe likely to make their situation much worse.

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  • [–] 1 point 1 year ago (4 children)

    Don't they not make FIFA anymore because they didn't want to pay for the license?

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  • [–] 1 point 1 year ago (3 children)

    FIFA 2026 just came out four days ago, so I'm pretty sure they still make it.

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  • [–] 3 points 1 year ago (2 children)

    You mean EA Sports FC 26? Which has been stripped of FIFA branding?

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  • [–] 9 points 1 year ago* (last edited 1 year ago) (5 children)

    Bye EA. Was nice knowing you.

    E: just noticed I’ve been playing EA games since M.U.L.E. on the C-64. Say what you want about the company itself, but they have a long history of making games people want to play. Been playing the entire Battlefield franchise since 1942. Sucks that you can’t play 2142 or even Hardline anymore.

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  • [–] 2 points 1 year ago (3 children)

    Been playing the entire Battlefield franchise since 1942

    Note to readers: 1942 is the name of a game, not the year of release

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  • [–] 3 points 1 year ago (2 children)

    Hence the italics to denote a title and not a generic date.

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  • [–] 9 points 1 year ago (1 child)

    Also, a bet on consumers being willing to pay AAA prices for slop

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  • [–] 9 points 1 year ago*

    I've not bought an EA game in 11+ years and see no reason to start now.

    "And then it got worse" isn't only a valid description of Russian History.

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  • [–] 9 points 1 year ago (1 child)

    Ah so we can see EA do a Kmart. Neat

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  • [–] 7 points 1 year ago

    They’re also betting on people buying this crap. Hopefully they don’t.

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  • [–] 7 points 1 year ago

    Hahaha sure, let them do that.

    I always hated them anyway. Good riddance.

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  • [–] 6 points 1 year ago (1 child)
  • [–] 5 points 1 year ago* (2 children)

    Vibe coding is one thing, but I am curious about the state of using of AI tools to reduce the cost of generating 3D assets, animations, and textures. I assume they are introducing this into Ignite and their other build tools, for more rapid prototyping if nothing else.

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    [–] 5 points 1 year ago

    Well now, I'd already basically given up on EA, glad I made the right choice

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  • [–] 5 points 1 year ago

    “The investors are betting that AI-based cost cuts will significantly boost EA’s profits in the coming years"

    I'll take that bet.

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  • [–] 4 points 1 year ago

    hope they least long enough to release the worst game in history.

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  • [–] 4 points 1 year ago (2 children)

    Game quality from this company will be absolute dogshit ai slop

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  • [–] 1 point 1 year ago (1 child)

    How many EA games require you connect to their servers just to play? How many have ToS where you need to install any updates before you play? How long before these PE folks figure out they can push updates to even older games that add data mining capacity?

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  • [–] 4 points 1 year ago (1 child)
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