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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

#441

Post by rchaud »

Nexxxeh wrote: post #339
boston_clone wrote: post #183

Earlier quoted context omitted.

Could you share why you feel the Saudis buying a huge company like EA to "shape global perspective" is a good sign?

I feel that the Saudis purchasing EA is specifically a good sign that future EA games won't be profit-focused at the expense of quality. I was talking to the GP and P comments in regards to the company's focus. They discussed the problems of current EA and whether future development would be increasingly profit-driven at the cost of quality. >>I feel like the need for constant growth (instead of just sustainability)…

PIF bought the English football club Newcastle ~4 years ago, and have raised season ticket prices by 15% since then. They have capitalists at the helm who don't care about soft power.

https://www.nytimes.com/athletic/6180646/2025/03/06/newcastl...

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

#442

Post by rchaud »

spixy wrote: post #363
nerdjon wrote: post #23

I am finding myself having some conflicted feelings on this. First, I absolutely hate who is buying them. Especially as a huge Bioware fan with a Mass Effect tattoo. That being said, putting aside who is buying them for a moment. I would actually be happy to see more gaming companies going fully private. I feel like the need for constant growth (instead of just sustainability) is what has caused much of the issues in…

Cannot public company just pay dividents? Then there can be no pressure to constant growth.

Microsoft paid dividends every year in the 2000s and their share price barely ever broke $40. Most shares in large companies are owned by pension funds, mutual funds and hedge funds. Without share appreciation, the value of these funds don't grow. They make far more money through share price growth than they do in dividends, so they advocate for the company to operate in a way that makes that happen.

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

#443

Post by rchaud »

NickM wrote: post #405
outside2344 wrote: post #400

Earlier quoted context omitted.

The PE firms strip the assets, aka have them take on huge amounts of debt, sell assets, and then pay them dividends etc. before they collapse.

Why would banks keep giving PE firms loans for these kinds of deals if the companies inevitably collapse and default on those loans? Not trying to defend PE here, but this narrative doesn't make sense to me.

First of all, investment banks are awash in capital thanks to 14 years of ZIRP and massive profitability. They don't like keeping cash on hand, so that means they dole it out into investments, some of which will flop.

Second, banks are the primary creditor in these deals, meaning they get paid first. They don't do these deals without ensuring that the company has enough saleable assets to ensure they get their pound of flesh. Lots of companies have billions in pension-earmarked reserves they don't have to pay out on if they declare bankruptcy. Guess who gets first dibs on that cash.

Third, they can shift the risk by selling their interest in these companies to another party. They are not stuck with it forever.

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

#444

Post by jajuuka »

manifoldgeo wrote: post #413

There's a recent book called "Plunder: Private Equity's Plan to Pillage America", and seeing this news makes me want to revisit it. The author outlines the usual tactics used by private equity firms to turn a functioning business into their own short-term profit factory, often driving the business into bankruptcy in the process. EA already has a reputation as a semi-broken company, but things can probably get a lot w…

We don't need to guess here though. PIF and Silver Lake have a pretty solid track record of over-investing in companies. Affinity Partners seems to be a shell company for the Trump family so I don't see them being active.

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

#445

Post by ddtaylor »

mvdtnz wrote: post #338
ddtaylor wrote: post #156

Earlier quoted context omitted.

There was a time in the earlier days of EA where the company had value. That time has passed. The company mainly sits on exclusive licenses and makes minimal changes to the franchises in an attempt to milk cash. The cash milking part has gone downhill recently. I genuinely hope they lose ALL of their exclusive sports licenses. They shouldn't be exclusive to begin with, but enabling these companies to hold the entire…

> There was a time in the earlier days of EA where the company had value. That time has passed. The company that just sold for $55 billion?

If we're comparing large companies that buy stuff up and milk profits etc. they are losing to other better executed giants like Tencent and Embracer Group.

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

#446

Post by kranke155 »

fidotron wrote: post #364
johnnyanmac wrote: post #344

Earlier quoted context omitted.

>One of the reasons Activision outperformed EA was they have a better culture of co-operation between departments. Efforts to improve this at EA never ceased to actually make it worse. Why do you think there was such a clash between departments? There's always some friction because different divisions have different interests, but EA seems to sound particularly bad at this. I also heard that EA was run very "corporta…

> Why do you think there was such a clash between departments? There's always some friction because different divisions have different interests, but EA seems to sound particularly bad at this. A distinct lack of an internal single threat to unify against, like a Steve Jobs style figure. I think the closest I saw to this was Peter Moore, who was a nice guy, but (thankfully) does not tolerate assholes at all. The resu…

The PS3 hack?

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

#447

Post by fidotron »

kranke155 wrote: post #446
fidotron wrote: post #364

Earlier quoted context omitted.

> Why do you think there was such a clash between departments? There's always some friction because different divisions have different interests, but EA seems to sound particularly bad at this. A distinct lack of an internal single threat to unify against, like a Steve Jobs style figure. I think the closest I saw to this was Peter Moore, who was a nice guy, but (thankfully) does not tolerate assholes at all. The resu…

The PS3 hack?

Well, mainly the PSN hack that followed.

Repairing and recovering from that outage required the Playstation org at Sony to adopt a degree of professionalism wrt all tech dev and operations that started paying off remarkably quickly.

At the time a good number of people thought as a result of all this Sony would be pushed out of the console business.

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

#449

Post by halJordan »

manifoldgeo wrote: post #413

There's a recent book called "Plunder: Private Equity's Plan to Pillage America", and seeing this news makes me want to revisit it. The author outlines the usual tactics used by private equity firms to turn a functioning business into their own short-term profit factory, often driving the business into bankruptcy in the process. EA already has a reputation as a semi-broken company, but things can probably get a lot w…

EA is the perfect candidate for private equity to destroy. There are zombie companies that need to be eviscerated, digested, and then excreted back into the world. The megacompanies of the video game industry are the result of a broken market and this is "nature healing itself." The free market will course correct and private equity is a perfectly acceptable vehicle for something like EA

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

#450

Post by tomhow »

fred_is_fred wrote: post #50

[flagged]

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