You may recall that EA was recently bought for a whopping $55 billion by a consortium led by Saudi Arabia’s Public Investment Fund (PIF), along with Silver Lake and Affinity Partners. It was a controverial deal, and according to a new report, it might get even more controversial.
Dinesh Nair has dropped a new report at Bloomberg which claims “people familiar with the matter” have told him that Saudi Arabia is considering merging EA with Savvy to create a gaming mego-company. According to the same sources, execs at the PIF are considering the move “to ensure better coordination between its assets”.
It’s important to note the decision has not made. It’s an option being considered. A bloody scary one.
If you need a crash course on Savvy, it’s essentially Saudi Arabia’s state-backed gaming and esports company. Established in 2021, the company has used its $38 billion – supplied by PIF to buy several companies, including mobile gaming giant Scopely who makes Monopolgy Go! and Pokemon Go!. Savvy is in the middle of buying Mobile Legends developer Moonton for $6 billion.
The PIF bought EA earlier this year in what was the large leveraged deal in history, basically leaving EA with a huge debt that must now be repaid. Given how controversial Saudi Arabia is, the deal was not exactly met with a warm reception.
If completed, the merger would create one of the largest gaming companies in the world, combining EA’s enormous console and PC business with Savvy’s growing mobile and esports empire. Exact comparisons are difficult because Savvy is privately held, but the combined group would likely sit among the industry’s biggest players, behind giants such as Sony, Tencent and Microsoft but potentially alongside or above companies such as Nintendo and NetEase.
There’s also another big if: should they decide to go ahead, the deal would still have to pass through a bunch of regulatory hurdles, meaning it could be stopped before it ever gets going.
I guess for now we just have to wait and see. The long-term fallout of Saudi Arabia owning EA is still to come and scary enough on its own, without the looming danger of a massive merger adding to it.