Since both companies are already owned by Saudi Arabia, it’s not out of the question that the consolidation could affect the recently acquired publisher.
Bloomberg reports that, since Electronic Arts is now almost entirely owned by the Saudi Arabian Public Investment Fund (PIF), the fund is considering merging Electronic Arts with another one of its subsidiaries that plays a prominent role in the gaming industry: Savvy Games Group. However, no decision has been made yet. The report adds that any potential merger will likely be put on hold until the PIF completes its $6 billion acquisition of the Chinese mobile gaming company Moonton, which was announced in March. The planned merger also faces numerous regulatory hurdles. From PIF’s perspective—and more broadly, Saudi Arabia’s, as the fund’s chairman is Mohammed bin Salman, the country’s de facto ruler—the merger appears to be a logical step. Savvy Games Group is a massive company in its own right. Its subsidiaries include the esports organization ESL Faceit Group and the publisher of Pokémon Go, Scopely. Soon, it will also include Moonton. Bringing all of these operations, along with Electronic Arts’ own significant ones, under one roof would likely simplify PIF’s future gaming industry strategy.
Another factor that may motivate PIF to merge is that money is starting to become scarce, even for Saudi Arabia, which is usually flush with cash. Mergers typically result in the elimination of overlapping activities, services, and associated expenses. As we’ve seen many times in the past, this often means layoffs. Electronic Arts employees are bracing for drastic staff cuts as the company manages its $18 billion debt resulting from PIF’s acquisition earlier this year. It’s reasonable to assume the new owners will seek other cost-cutting measures.
It is unclear how the proposed merger would fare under regulatory scrutiny. The resulting company would be a global giant effectively controlled by a single individual. While this may seem like it would certainly face obstacles, bin Salman has close ties to current U.S. President Donald Trump. The PIF’s acquisition of Electronic Arts was facilitated in part by Trump’s son-in-law, Jared Kushner.
These connections likely helped the PIF avoid the aggressive—and ultimately futile—steps that Microsoft faced during its acquisition of Activision Blizzard, and they may prove useful in the future as well.
