2 hrs ago
Saudi Wealth Fund Weighs Electronic Arts-Savvy Games Merger
Saudi Arabia’s investment fund owns both Electronic Arts and Savvy Games.
It is considering putting the two companies together.
Electronic Arts makes games such as EA Sports FC, Battlefield and The Sims.
Savvy owns or controls mobile games including Monopoly Go!
and Pokémon GO.
The companies would become a very large gaming business if they merged.
However, no final decision has been made.
Savvy may first need to finish buying Moonton for $6 billion.
Regulators could examine the deal to see whether it would reduce competition.
The talks are happening while many gaming companies are dealing with slower growth and layoffs.
Saudi Arabia’s Public Investment Fund is considering merging Electronic Arts with Savvy Games, Bloomberg News reported.
The companies are both controlled by the Public Investment Fund, which acquired Electronic Arts for about $55 billion last month.
A combination would unite franchises including EA Sports FC, Battlefield and The Sims with Savvy-owned mobile titles such as Monopoly Go! and Pokémon GO.
No final decision has been made, and a merger is unlikely before Savvy completes its planned $6 billion acquisition of Chinese gaming company Moonton.
The potential deal could face antitrust scrutiny as the gaming industry confronts slower growth, layoffs and cost cuts.
- Who
- Saudi Arabia’s Public Investment Fund, Electronic Arts and Savvy Games are involved; Bloomberg News reported the deliberations.
- What
- The Public Investment Fund is considering merging Electronic Arts with Savvy Games.
- Where
- The companies and acquisitions span Saudi Arabia, the United States and China, according to the report.
- When
- The report was published Thursday; the deal is not expected before Savvy completes its Moonton acquisition.
- Why
- The proposed combination would create a larger gaming company with major franchises and mobile games as the industry seeks scale and recurring revenue.
Potential benefits
Potential concerns
Creating a larger gaming company
Potential benefits
Supporters of a combination could argue that joining the businesses would unite major console, PC and mobile franchises and provide greater scale.
Potential concerns
Critics could argue that combining two companies under the same owner may further concentrate the gaming market.
Industry strategy
Potential benefits
The merger could help the companies pursue durable recurring revenue while the gaming industry faces a post-pandemic slowdown.
Potential concerns
The deal could draw antitrust scrutiny, particularly as regulators have examined large gaming transactions such as Microsoft’s acquisition of Activision Blizzard.
Key facts
- Companies involved
- Electronic Arts and Savvy Games
- Controlling owner
- Saudi Arabia’s Public Investment Fund
- Electronic Arts acquisition
- Approximately $55 billion, completed last month
- Savvy acquisition pending
- Moonton, valued at $6 billion
- Major franchises cited
- EA Sports FC, Battlefield, The Sims, Monopoly Go! and Pokémon GO
- Regulatory issue
- A merger could face antitrust scrutiny
- Savvy leadership
- CEO Brian Ward stepped down the previous week
Sources
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