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- Electronic Arts will soon go private in a $55 billion deal, the largest leveraged buyout in history.Andrew Wilson, who joined the company in 2000, will remain CEO.The deal relieves Wilson of Wall Street pressure, but EA's new owners may have their own demands.
Electronic Arts CEO Andrew Wilson will soon no longer have to answer to Wall Street, but he may not be off the hook.
The video-game company he has led since 2013 announced on Monday that it will go private in a $55 billion all-cash deal backed by Saudi Arabia's sovereign wealth fund, as well as the investment firms Silver Lake and Affinity Partners.
It is the largest leveraged buyout in history, and shareholders will get a premium of around 25% on Thursday's closing share price, the parties involved said in a joint statement. Wilson, who assumed the additional title of chairman in 2021, will continue as CEO.
The deal appears to bode well for EA, industry observers told Business Insider. They say the price is fair, especially as the company had no other serious buyers looming, largely due to the tough antitrust landscape. It took Microsoft nearly two years of battling regulators in the US, the European Union, and the UK, for example, to close its acquisition of Activision Blizzard in 2023.
For Wilson, though, the future is less clear. On the one hand, taking EA private means he will no longer be beholden to the whims of shareholders, who earlier this year punished the company for cutting its fiscal-year outlook mainly due to challenges with its flagship soccer franchise, "EA Sports FC," formerly known as "FIFA." Shares plummeted nearly 17% on January 23, marking their biggest single-day decline in nearly 17 years.
"Andrew was literally feeling pressure to grow the stock," said Wedbush Securities analyst Michael Pachter, who has covered the video-game industry for more than two decades.
But Wilson, a native of Australia who joined EA in 2000, could still face heat from the video-game maker's new owners, said Peter Cappelli, a management professor at the University of Pennsylvania's Wharton School.
"Investor pressure is always a little diffused," he said. With just a few private owners, "there's no hiding or escaping."
Leaving on a high note
EA is exiting the stock market on a high note. The company's shares have rallied in recent months in anticipation of "Battlefield 6," the next installment of its shooter franchise due out October 10.
The game was expected to compete with "Grand Theft Auto VI," but in May, the developer of that highly anticipated title, Take-Two Interactive Software, postponed its release from what would've also been this fall to May 2026.
From here, the only direction EA can likely go in as a publicly traded company "is down," Joost van Dreunen, who teaches the business of video games at New York University, told Business Insider.
One reason is that "Battlefield 6" will still face competition from Activision's next "Call of Duty" this fall, and eventually from "Grand Theft Auto 6," too, which analysts expect to be a massive hit.
Another is that EA has become too dependent on dated, evergreen franchises like "The Sims" and "Madden NFL" under Wilson's tenure to drive meaningful growth, said Pachter. He added that EA has also struggled to succeed in mobile gaming, the largest segment of the video-game industry by revenue.
"EA has tried a bunch of things that they believed would be innovative since Andrew became CEO, and almost none of them worked," he said.
By going private, Wilson, 51, can perhaps focus more on driving innovation at EA by leaning into generative AI.
"This remarkable technology is not merely a buzzword for us. It's the very core of our business," he said at the company's Investor Day in September 2024.
Wilson could also work with the Saudis to expand EA's footprint in esports. The annual Esports World Cup, run by a nonprofit, is held in Riyadh.
In a memo to employees, Wilson noted that he's excited to continue as CEO and described the deal as a recognition of their collective work.
"This is a historic moment," he wrote. "With the support of our new partners, the future we are building together is brighter than ever."
