What Saudi Arabia needs with EA video video games

One of the most important gaming corporations on the planet, the US-based Electronic Arts, is about to be taken over by a consortium of patrons that embody Saudi Arabia’s Public Investment Fund.

The “blockbuster” $55 billion (£41 billion) takeover is the “latest win” for Saudi Arabia’s Crown Prince Mohammed bin Salman, an avid “video-game fan” who notably enjoys enjoying (Microsoft’s) “Call of Duty”, stated Bloomberg.

Electronic Arts makes a few of the greatest gaming franchises, together with “Fifa”, now referred to as “EA Sports FC”, “The Sims”, “Madden NFL” and “Battlefield”, and the deal is ready to be the most important leveraged buyout of a publicly traded firm in historical past.

‘Money-printing machine’

The EA takeover is “part of a push to deepen trade ties” between Saudi Arabia and the US, said Bloomberg. In May, the crown prince promised to “boost investment” in America to “$1 trillion (£745 billion) in the coming years”.

Also involved in the deal is Affinity Partners, a private equity firm run by Donald Trump’s son-in-law Jared Kushner. He was apparently “key” to winning Saudi Arabia’s interest, said the Financial Times. His presence may additionally “ease the deal’s path” by the Committee of Foreign Investment within the United States, which is liable for reviewing firm transactions involving patrons from overseas.

“It’s not hard to see why EA is an attractive target for private equity,” stated GamesHub. The firm is a “money-printing machine” with a “low-risk, high-reward” profile.

For Saudi Arabia, this “advance into gaming” is a part of its effort “to diversify its investments away from oil”, stated The New York Times. Its Public Investment Fund had already dedicated to spending $38 billion (£28 billion) throughout the gaming sector by 2030. Riyadh hosted the Esports World Cup over the summer season, and can host the primary Olympic Esports Games in 2027. The “gaming push is part of a broader bet by the kingdom on sports”, together with backing LIV Golf and making main investments in soccer and blended martial arts.

‘Gameswashing’ questions

Just as that funding in sports activities triggered accusations of “sportswashing” – investing in sporting occasions to “launder” its worldwide popularity and distract the world from its poor human rights file – Saudi is now dealing with questions on “gameswashing”, stated GamesHub.

The Public Investment Fund has already spent billions on fairness stakes in Nintendo, Take-Two Interactive and Activision Blizzard and, earlier this 12 months, acquired the gaming division of Niantic, whose titles embody “Pokémon Go”. But the EA deal “is by far its most significant soft power move”.