Saudi Arabia reportedly looking at merging Electronic Arts with Savvy Games Group
With Electronic Arts now almost fully owned by Saudi Arabia's Public Investment Fund, a Bloomberg report says the wealth fund is now giving thought to merging it with the PIF's other gaming crown jewel, Savvy Games Group.No decisions have been made at this point, according to the report, which also says that any potent...
With Electronic Arts now almost fully owned by Saudi Arabia's Public Investment Fund, a Bloomberg report says the wealth fund is now giving thought to merging it with the PIF's other gaming crown jewel, Savvy Games Group.
No decisions have been made at this point, according to the report, which also says that any potential merger would likely wait until the completion of the PIF's acquisition of Chinese mobile gaming company Moonton for $6 billion, a deal that was announced in March. The proposed merger would also have to overcome various regulatory hurdles.
From the perspective of the PIF, and by extension Saudi Arabia—the fund's chairman is Mohammed bin Salman, the de facto ruler of the nation—a merger would seem to make sense. Savvy Games Group is a behemoth in its own right, with subsidiaries including esports org ESL Faceit Group, Pokémon Go creator Scopely, and—soon—Moonton. Bringing that and EA's own significant operations under one umbrella would presumably simplify the PIF's gaming strategy going forward.
The PIF may also be motivated to make a merger by the fact that money, even for the ever-flush Saudi kingdom, is getting a bit tight. Mergers typically result in the elimination of duplicated operations and services, and their related expenses. As we've seen many times in the past, that means layoffs: EA employees are already bracing for deep cuts as the company moves to take on the $18 billion debt load incurred as a result of the PIF's acquisition of the company earlier this year, and it's not unreasonable to think that the new Saudi owners would be looking for other ways to pare back costs.
How a proposed merger would fare under regulatory scrutiny is less clear. The resulting company would be a global powerhouse, effectively under the control of a single person—a person who's been credibly accused of ordering the murder and dismemberment of journalist Jamal Khashoggi in 2018, don't forget.
That might seem like the sort of thing that's destined to run into roadblocks, but bin Salman is also close with current US president Donald Trump, while the PIF's acquisition of EA in the first place was facilitated in part by Trump's son-in-law Jared Kushner. Those connections may have helped the PIF avoid the aggressive (and ultimately futile) actions faced by Microsoft when it acquired Activision Blizzard, and they may prove useful again in the future too.
Electronic Arts declined to comment on the report. I've also reached out to the Public Investment Fund and Savvy Games Group for comment, and will update if I receive a reply.
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Original reporting appears on the publisher’s site.
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