American Video Game company Electronic Arts Inc. (EA) is going private in a $55 billion deal with private equity firm Silver Lake, the Saudi Arabia Public Investment Fund (PIF), and Affinity Partners, the investment company owned by Jared Kushner, to the disappointment of gamers, especially fans of the life simulation game The Sims.
The deal is good news, especially for shareholders who are set to earn $210 per share. By going private, EA will also no longer be beholden to the demands of the public market and may be able to be more creative. But fans and some analysts are wary about the sale, and what it might mean for The Sims in the long run.
In EA’s announcement, Kushner said that he was excited about the future of the video game company, which also boasts video game franchises such as Apex Legends, Battlefield, Need for Speed, and EA Sports FC, formerly FIFA.
“Electronic Arts is an extraordinary company with a world-class management team and a bold vision for the future. I’ve admired their ability to create iconic, lasting experiences, and as someone who grew up playing their games — and now enjoys them with his kids — I couldn’t be more excited about what’s ahead,” said Kushner.
PIF, Saudi Arabia’s sovereign wealth fund, has also invested in sports and gaming in the past. And with partnerships with sports franchises such as the National Football League (NFL) and Formula One (F1), EA is a natural addition to PIF’s portfolio.
More Expenses, Less Diversity
Of the $55 billion to be given to EA’s old shareholders, $36 billion will be covered by the consortium, while the remaining $19 billion will be financed by a debt to JPMorgan Chase. To pay off this huge loan, Michael Futter, founder of video game industry consultancy firm F-Squared, tells CNBC that EA will have to rely on other revenue sources like microtransactions and battle passes, further burdening gamers.
For fans of The Sims, this means more downloadable content (DLCs) or packs to buy. For years, The Sims 4 players have had to purchase several DLCs in the form of packs and kits to enjoy a full gaming experience, making the life simulation game costly despite its base game being free. With the video game company going private, “simmers” — the name given to avid The Sims players — may have to buy even more of these DLCs to keep EA afloat.
In a video discussing the deal, The Sims streamer Kayla Sims said that the debt could also mean “layoffs for EA employees, restructuring,” and budget cuts, which would affect the quality of the games the company puts out.
But the biggest concern for fans is the threat that the new owners allegedly pose to The Sims’s diversity and inclusivity. Kushner is the husband of Ivanka Trump, the daughter of conservative U.S. President Donald Trump.
The video game franchise has been lauded for its cultural and gender inclusivity, featuring expansive character customization, worlds modeled after real-world locations, and gameplay that draws inspiration from diverse cultures. “The Sims has been an inclusive game for a very, very long time,” said Kayla. “And it horrifies me to think of them rolling back that progress, or somehow censoring the game. I think that making a change like that would alienate the entire base of The Sims.”
Kayla added, “These people are buying EA because they think it’s going to make them a lot of money. So all of their decisions are motivated by money, and I think that to make The Sims less diverse would be a catastrophically bad decision.”
