Saudi Arabia’s EA Acquisition Faces Growing Opposition from Developers and US Politicians

Table of Contents

Add a header to begin generating the table of contents

A proposed $55 billion acquisition of Electronic Arts (EA) by Saudi Arabia’s Public Investment Fund and private equity firms is encountering significant resistance. Game developers, represented by the United Videogame Workers-CWA union, and a bipartisan group of US senators have voiced strong concerns, citing potential job losses, threats to creative freedom, and national security risks.

Key Takeaways

Game developers are concerned about job security and creative autonomy.
US politicians cite national security and foreign influence risks.
The deal involves substantial debt, raising fears of studio closures and layoffs.

Developer Concerns

The United Videogame Workers-CWA union has publicly stated that EA workers were not represented during the negotiation of the buyout. The union highlighted EA’s strong financial performance, with annual revenues of $7.5 billion and profits of $1 billion, questioning the necessity of a leveraged buyout that involves nearly $20 billion in debt. They fear this debt could lead to studios being "arbitrarily deemed ‘less profitable’" and subsequently closed, or result in widespread layoffs, especially given recent industry-wide job cuts. There are specific worries about studios like BioWare, with some employees speculating about its future due to its progressive narrative leanings, which might clash with the ownership’s potential values.

Political Pushback

US Senators Richard Blumenthal and Elizabeth Warren have expressed "profound concern" regarding the potential national security implications and foreign influence associated with the acquisition. In a letter to the Secretary of the Treasury, they urged for a thorough investigation by the Committee on Foreign Investment in the United States (CFIUS). Their concerns include the Public Investment Fund’s ties to the Saudi government, the potential for increased foreign influence in the US, and data privacy issues arising from EA’s collection of user information. The senators also noted the involvement of Jared Kushner’s Affinity Partners in the deal, questioning the likelihood of regulatory rejection.

Calls for Scrutiny

The United Videogame Workers union has launched a petition urging regulators, particularly the US Federal Trade Commission (FTC), to "scrutinize this deal closely." They are calling for assurances that the acquisition will protect jobs, preserve creative freedom, and ensure accountability to the workers who contribute to EA’s success. The union emphasizes that workers must have a say in decisions affecting their industry, especially when private equity or foreign investors take companies private, often leading to a loss of transparency and worker power.