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EA Announces Agreement to be Acquired by PIF, Silver Lake, and Affinity Partners

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Re: EA Announces Agreement to be Acquired by PIF, Silver Lake, and Affinity Partners

#251

Post by dehrmann »

Found this:

> The investors are betting that AI-based cost cuts will significantly boost EA’s profits in the coming years, people involved in the transaction told the Financial Times.

It halfway makes sense. EA is priced at current game production costs, but if that goes down, it'll be worth more. The other side of that is that someone might be able to vibe code with "make the next iconic video game franchise in the vein of Zelda or Pokemon." If EA's sports license moat is strong enough, this might not be an issue, but otherwise, it feels like that cuts both ways.

Re: EA Announces Agreement to be Acquired by PIF, Silver Lake, and Affinity Partners

#252

Post by Sohcahtoa82 »

gjsman-1000 wrote: post #194
ecshafer wrote: post #135

Earlier quoted context omitted.

EA won the most hated company award because video game players are dramatic. Charging $5 for a launch DLC is a drop in the bucket compared to the ways that some larger more critical companies can affect your life.

[flagged]

> Video game players are hilariously, pitiably dramatic.

I'm a gamer and I 100% agree with you.

The simple fact is, AAA game prices have been stuck at $60-70 for 30 years. Despite $60 in 1995 being worth ~$127 today, games are still $60. They haven't kept up with inflation. Games are relatively cheap while development costs for AAA are ridiculously high.

A typical SNES game had 10-30 people working on it and would have it done in 1.5-3 years. AAA games will have typically 1,000-3,000 and could take 3-7 years, so we're talking 100-200 times the development cost.

Now, compare the best-selling SNES games [0] to the overall best-selling games [1]. Modern AAA games barely reach 10x the unit sales as old SNES games.

Margins are thinning.

[0] https://en.wikipedia.org/wiki/List_of_best-selling_Super_Nin...

[1] https://en.wikipedia.org/wiki/List_of_best-selling_video_gam...

Re: EA Announces Agreement to be Acquired by PIF, Silver Lake, and Affinity Partners

#253

Post by [deleted] »

qn9n wrote: post #171
Yizahi wrote: post #143

Earlier quoted context omitted.

You had any hope for them?

I was hoping the launch of early access skate. would be received poorly, it was due to the beloved franchise being made into a Fortnite-like money grabbing scheme, would cause them to run backwards and fix it releasing an actual skate series game with some live service features but a solid focus on the original franchise. However that hope is dwindling.

[deleted]

Re: EA Announces Agreement to be Acquired by PIF, Silver Lake, and Affinity Partners

#254

Post by typpilol »

wat10000 wrote: post #129
typpilol wrote: post #126

Earlier quoted context omitted.

Meanwhile... we have a former terrorist who posed after cutting multiple persons heads off speaking at the UN....

Is that related somehow or are you just trying to diminish the awfulness of Saudi Arabia's government by bringing up the awfulness of some other guy?

Just bringing up the absurdity of it. I wasn't trying to say Saudi isn't as bad, I meant to say they're all terrible

Awful people run the world.

Re: EA Announces Agreement to be Acquired by PIF, Silver Lake, and Affinity Partners

#255

Post by Maro »

As someone who works in the Middle East at a large company, I expect that next step will be a small army of current and ex-McKinsey MBAs to arrive at EA to "set strategies", "implement operating models", "run transformation exercises", "track value creation", and so on.

On the upside, maybe they will release a new AAA Dilbert game though!

Re: EA Announces Agreement to be Acquired by PIF, Silver Lake, and Affinity Partners

#256

Post by forgotoldacc »

imglorp wrote: post #164
nabla9 wrote: post #130

PIF: Saudi Arabian State fund. Affinity Partners: Jared Kushner.

Assuming the usual follow the money angle, what's the political play here for Kushner and the White House?

Tariffs on any game that fails to meet some specific condition that EA does. Pump the stock on EA. Drop stock prices on other companies. Buy them up. Repeat.

Plus you can pull a Facebook/YouTube/Tiktok and use it to push impressionable people politically towards you. Media made for viewing is all a state enterprise at this point. Interactive media (games) have been looked over, but it seems that won't be the case anymore.

Re: EA Announces Agreement to be Acquired by PIF, Silver Lake, and Affinity Partners

#257

Post by gruez »

CaptainOfCoit wrote: post #152
gruez wrote: post #101

Earlier quoted context omitted.

>What will PIF, Silver Lake and Affinity partners do to monetize such client software, beyond games, that is pre-installed on 1 billion devices? How is this different than something like Broadcom buying VMware? Corporate machines are probably far juicier than a bunch of 18-35 yr olds computers. Not to mention that a wide install base also means if they go rogue it'll be detected even faster.

> Corporate machines are probably far juicier than a bunch of 18-35 yr olds computers. "Jucier" in what context/for what? Say you wanna influence how people feel about social issues, what computer user is "jucier" then? Not saying that that's the plan or whatever, just that the context matters.

>Say you wanna influence how people feel about social issues, what computer user is "jucier" then?

How are you going to "influence how people feel about social issues" without being overly obvious? In contrast there's plenty of nefarious stuff you can straightforwardly do on corporate machines: insider trading, corporate espionage, sabotage, PII theft, ransomware, and credit card fraud just to name a few.

Re: EA Announces Agreement to be Acquired by PIF, Silver Lake, and Affinity Partners

#258

Post by Workaccount2 »

deaddodo wrote: post #149
Workaccount2 wrote: post #108

Earlier quoted context omitted.

I don't understand why we would have an expectation for the owner of a company to be happy with a stagnant investment, so the players of their games can get more bang for their buck? It's something that feels good, but when you dig into the nitty-gritty of it, it's basically a "This guy should take the hit so we as a group can enjoy the fruits of it"

You seem to be fundamentally misunderstanding capital and capitalism. A “stagnant” company isn’t a failed one. It’s profitable. But perhaps it has saturated its market, or otherwise has no other avenues of growth without handicapping what it excels in. This is fine, as long as it continues to increase with inflation (as it should, if it’s increasing its prices to match so) it will stay profitable and increase your ca…

The idea that people should be content with an investment that has 0% real return in a very risky environment (video game development) is not a serious argument, and not one that you would respect either.

If you have $100M tied up in a game company that (maybe!) returns 3% a year (matching inflation), why the hell wouldn't you sell it for $100M, and then go put that in bonds which will return 5% with much less risk and no work or time needed on your part?

Again, it's not fair to expect charity from owners (public or private) so you can stretch your dollar further. Whether we are talking about video games, napkins, coffee beans, or warehouse leases, it's all investments that give returns, and generally people with money are extremely smart about good and bad investments, just like you would be if you were in that position (i.e. not voluntarily taking 3% when 5% is easier and safer).

Re: EA Announces Agreement to be Acquired by PIF, Silver Lake, and Affinity Partners

#259

Post by estimator7292 »

byronic wrote: post #131

Not referencing the Saudi Arabia portion here specifically but LBOs as documented in the book Barbarians at the Gate (covers Nabisco/RJR tobacco) gives me basically zero hope for the future of EA. EA was already rabid cost-cutters and RIF specialists, and they won the most hated company award for however many consecutive years for a reason. Giving them crushing debt to go along with their propensity to give large exe…

It would be fantastic if EA went away. They've been such a blight on the entire industry, killed off or destroyed so many good franchises, developers, and studios.

Re: EA Announces Agreement to be Acquired by PIF, Silver Lake, and Affinity Partners

#260

Post by Sohcahtoa82 »

LarsDu88 wrote: post #193

Videogamers have fickle tastes that can change on a whim, and the entire dev stack for game development is becoming more accessible and commoditized, creating massive amounts of competition. Even more so when it comes to squeezing beloved franchises out. Multiple franchises have died under EA (Sim City anyone?), and one of the top franchises EA owns basically has morphed into a "Middle East combat simulator" (Battlef…

> Multiple franchises have died under EA (Sim City anyone?)

Cities: Skylines managed to fill that gap, but then C:S2 was an utter dud on release.

I think part of the problem is that we've reached a point where the players expect each individual citizen to be simulated, with the traffic to match, but doing that creates such a massive demand on CPU power that even a modern monster system will struggle once your city reaches the high 6-digit population. Simulating 100K vehicles in real time isn't easy. Even if you're not rendering them all because of draw distance limitations, you're still running path finding regularly if you want vehicles to be smart and try to bypass traffic jams, not to mention just trying to make them respond to traffic signals and not rear-end each other.

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