After Electronic Arts (EA) completed a US$5.5 billion (approximately NT$165 billion/approximately HK$43.1 billion/approximately RM23.3 billion) privatization acquisition, it seemed to usher in a new beginning, but the outside world is now paying more attention to another issue.
According to foreign media reports, this one of the largest leveraged buyouts in history has saddled EA with debts of approximately US$20 billion (approximately NT$600 billion/approximately HK$156.6 billion/approximately RM84.8 billion). The scale of debt has skyrocketed, triggering concerns that in the future, it may only be able to repay the huge loan through layoffs, cost cutting, or even accelerating the introduction of AI.
Debt has skyrocketed, and the scale far exceeds that of Ubisoft!
Analysis pointed out that EA’s original debt scale was not high, but this privatization was a typical leveraged buyout (Leveraged Buyout), of which approximately US$20 billion came from bank financing. Therefore, the new company must bear high interest and repayment pressure for a long time.
Because of this, many market analysts believe that EA will rely more on highly profitable IPs such as “Battlefield/Battlefield”, “The Sims”, and “EA Sports FC” in the future, and it may be more difficult to obtain investment for riskier new works or experimental projects.
Employees and players are starting to worry
What is even more concerning is that the gaming industry has experienced multiple waves of layoffs in recent years. Therefore, many analysts believe that EA, which is now burdened with huge debts, is likely to further reduce manpower, reduce development costs, and even actively introduce AI tools to improve operational efficiency. There have also been many discussions in communities such as Reddit. Some players are worried that EA will launch more paid content and increase game monetization in the future. Others are worried that the most affected will still be the front-line developers, rather than the investors who promoted the acquisition.