Saudi wealth fund weighs merging EA with Savvy Games

Saudi Arabia's Public Investment Fund is considering combining Electronic Arts with Savvy Games Group to create one of the world's largest gaming companies, Bloomberg reported on Thursday. The potential merger would unite major franchises including Madden NFL, Battlefield, The Sims, EA Sports FC, Pokémon Go, and Monopoly Go under a single entity controlled by the sovereign wealth fund.bloomberg

A Consolidation Play

PIF executives are weighing the combination to "ensure better coordination between its assets," according to people familiar with the matter cited by Bloomberg. No final decisions have been made, and a deal is unlikely to move forward until Savvy completes its $6 billion acquisition of Chinese mobile gaming company Moonton, the maker of Mobile Legends.reuters+1

The PIF led a consortium that acquired EA for roughly $55 billion, taking the publisher private in a deal that closed on August 4. The fund separately pumped $38 billion into Savvy Games, which used the capital to acquire mobile publisher Scopely for $4.9 billion and Niantic's games business — home of Pokémon Go — for about $3.5 billion. Merging the two would give the PIF a single vehicle for making acquisitions and developing games across the $214 billion gaming industry, rather than running multiple subsidiaries independently.kotaku+3

Regulatory and Leadership Questions

Any combination would likely face antitrust scrutiny, as regulators have closely examined large gaming-sector transactions in recent years, including Microsoft's ↗ 0.16% $69 billion acquisition of Activision Blizzard. EA and PIF declined to comment on the report, according to Reuters.cosmicbook+1

The deliberations come amid a leadership transition at Savvy. CEO Brian Ward stepped down last week after overseeing the group's global investment push, with PIF deputy governor Turqi Alnowaiser taking over as interim CEO. Alnowaiser was the fund's public face during the EA buyout, and Bloomberg noted the PIF is tightening its grip on its portfolio companies.reuters+1

Industry Context

The gaming industry is grappling with a post-pandemic slowdown marked by cost cuts and layoffs, pushing companies to pursue scale and recurring revenue streams. Reports from inside EA indicate that developers and ground-level workers have been kept largely in the dark about the implications of the PIF takeover, with many anticipating layoffs across the company's studios, according to Kotaku. Being folded into Savvy's mobile-heavy portfolio is unlikely to ease those concerns, GamesRadar noted.gamesradar+2