The $55 billion acquisition “makes no sense whatsoever,” according to industry experts, who are already predicting layoffs and the closure of several studios. Joost Van Dreunen and Serkan Toto break down the deal’s potential consequences.

The second-largest acquisition in gaming history — a staggering $55 billion deal — has thrust Electronic Arts and the Saudi Arabian Investment Fund into the middle of a heated debate. While the transaction still awaits regulatory approval, concerns about EA’s future are already mounting. Following a wave of headlines, analysts from both the gaming and financial sectors agree on two major outcomes: mass layoffs and studio shutdowns are almost inevitable.

Joost Van Dreunen, a professor at the Stern School of Business, told GamesRadar that the company is likely to consolidate underperforming studios while strengthening its sports franchises — which currently account for about 70% of revenue — through larger teams and increased investment. On the other hand, teams working on lower-margin projects may face closure or divestment. Van Dreunen specifically pointed to BioWare, whose recent release, Dragon Age: The Veilguard, fell short of both sales and critical expectations.

Serkan Toto of Kantan Games echoed this sentiment, predicting that EA will double down on high-return IPs while cutting back on more experimental and original titles. David Cole from DFC Intelligence added that the company could opt to sell “secondary studios or lesser IPs” rather than eliminating them outright.

The Price Tag Is Too High — And So Is the Debt

The nearly $20 billion in debt tied to the acquisition further fuels fears of job cuts and asset sales. According to Toto, deals of this magnitude are typically followed by “radical restructuring, layoffs, and strategic shifts,” and there’s little reason to believe EA’s situation will be any different. Still, the company has attempted to reassure staff that no immediate changes to teams or positions are planned.

Some analysts are also questioning the logic behind the deal. Van Dreunen argues that the $55 billion valuation “doesn’t make sense,” as it significantly overvalues EA based on its annual cash flow and the limited growth potential of its core businesses, such as sports titles and live service games. On the flip side, a shift to private ownership could give EA more freedom to invest aggressively in key franchises like Battlefield, EA Sports, and Apex Legends without constant shareholder pressure.

Many see the involvement of the Saudi Private Investment Fund as a positive sign. Its participation could bring a major influx of capital over the coming years and even “provide relief from a strict focus on profitability.” While some cuts appear inevitable, most of EA’s IPs are expected to remain intact. The question now is whether these changes will spark creativity and new game development — or push the company toward a more conservative strategy centered around safe, established franchises.

Source: 3djuegos