As Electronic Arts moves closer to closing a sale of the gaming company to Saudi Arabian investors, it’s facing backlash from a group of protestors who are calling it a bad deal.
A coalition calling itself the Players Alliance staged a protest outside Electronic Arts’ Redwood City headquarters this week. Dressed as Sims characters, the protesters held signs that read “Stop the deal” and unfurled a 50-foot-long petition containing more than 70,000 signatures from gamers, developers and creators who are opposed to the $55 billion acquisition of the gaming company behind major franchises such as “The Sims” and “Madden NFL.”
The demonstration follows Electronic Arts’ announcement last year that it would be acquired by Saudi Arabia’s Public Investment Fund and investment firms Silver Lake and Affinity Partners.
If it gets across the finish line, the all-cash acquisition would be the largest buyout of a publicly traded company to date.
Upon closing, Saudi Arabia’s PIF would control a majority of the company, and EA agreed to take on $20 billion in debt. Shareholders have already approved the acquisition. It is now awaiting approval from federal regulators.
Members of the Players Alliance say they believe the deal will likely lead to layoffs and other major cuts to the company, including replacing employees with AI technologies. The group also suspects consumers will ultimately pay the price for EA’s additional debt, as the gaming giant could continue to double down on in-game purchases — a pain point for some gamers — to help bolster company finances.
EA declined to comment on the matter.
“We believe that this will not only affect EA games, but this sets a precedent in the gaming industry,” said East, who participated in this week’s protest alongside 15 other gamers. “Other gaming companies are going to follow a similar model, and gaming as a whole becomes less about community and creativity. It’s all about the monetization of it.”
The Players Alliance was founded a little over a year ago, with the mission of informing consumers about the inner workings of deals like the EA acquisition and preserving the gaming community.
East added, “It’s getting to a place where gaming is starting to feel like it’s less about the community and the art and expression … That’s not fair to the gamers, the consumers, and it’s definitely not fair to developers that put their heart into building certain things.”
There’s also concern about how Saudi Arabian investors could affect the content in EA’s games. Titles like “The Sims,” where characters can have same-sex relationships, are often regarded as a safe space for members of the LGBTQ+ community. But because homosexuality is illegal in Saudi Arabia, East fears things may change.
Saudi Arabia’s PIF has an interest in EA, as it builds on its latest efforts to diversify its investment holdings. Many of the country’s Public Investment Fund interests have been anchored in Hollywood, including adding $24-billion to support Paramount Skydance’s acquisition of Warner Bros and sports, like in the upcoming FIFA World Cup.
Just last month, the company pulled its funding of the LIV Golf tournament after reportedly losing billions, according to the Wall Street Journal. Electronic Arts also has a similar sports-based appeal, as it’s known as one of the biggest sports-gaming companies in the industry, with EA Sports FC for soccer and Madden NFL.
Electronic Arts was founded in 1982 in Northern California. The company maintains a presence in the Los Angeles area with offices in Marina del Rey and Chatsworth. In recent years, EA has undergone several rounds of layoffs, as the gaming industry consolidates. The industry saw a boost during the COVID-19 pandemic as people looked for ways to entertain themselves at home. But since then, many companies have undergone cuts as they adjust to increased production costs and the concentration of demand on a smaller number of mega-hit, live-play games.
If the EA’ acquisition receives final approval, the transaction is expected to close later this year. EA’s headquarters would remain in Redwood City and Chief Executive Andrew Wilson will keep his position.
Times staff writer Wendy Lee contributed to this report.