Saudi Investors Eye Formation of Gaming Giant with EA and Savvy Games Merger

Saudi PIF Considers Merging EA with Savvy Games Group

Less than two months after the Saudi Arabian government’s Public Investment Fund led a consortium to acquire EA in a $55 billion deal, reports suggest that the new owners are contemplating merging the gaming giant with their existing firm, Savvy Games Group. This potential merger aims to create a powerhouse company that will serve as a platform for all future video game-related ventures backed by the Saudi wealth fund.

Bloomberg reports that executives are currently evaluating this merger as a strategy to enhance coordination among the gaming businesses owned by the Saudi PIF. While no final decision has been reached yet, the ongoing acquisition of Chinese mobile game developers and publishers Moonton by Savvy for $6 billion indicates that an EA/Savvy merger may not materialize immediately. Additionally, any potential merger would need approval from antitrust regulators, similar to the initial acquisition of EA by the Saudi PIF.

If the merger were to proceed, it would result in the formation of one of the largest entities in the gaming industry. Speculations suggest that a merger with Savvy could lead EA to intensify its focus on mobile gaming, in addition to its traditional console and PC offerings.

However, as seen in previous major acquisitions like Microsoft’s purchase of Activision Blizzard, mergers often lead to workforce restructuring. Employees at EA have expressed concerns about possible job cuts or reorganization following the Saudi acquisition. Leveraged buyouts typically involve loading the acquired company with debt, which can prompt executives to make significant cuts to maximize profits.

Furthermore, there are apprehensions among EA staff about potential influences from the Saudi government on creative decisions in game development. Amnesty International has highlighted the Saudi government’s concerning human rights record, raising worries among employees about aligning with government preferences in game content.

Despite reassurances from EA, some workers fear that creative decisions may be influenced by the Saudi government’s preferences, potentially leading to project cancellations or alterations to cater to the government’s expectations.

For a deeper insight into the impact of the EA-Saudi deal, read Edwin’s interview with Star Wars: Zero Company developers, Bit Reactor, who signed a publishing deal with EA before the acquisition.