Business · Companies · 4 hrs ago
BioWare’s closure highlights risks of private equity buyouts
BioWare, the studio behind Mass Effect and Dragon Age, has closed.
The studio’s new owners were identified as Saudi investors and Jared Kushner, and the closure followed its acquisition.
The shutdown came alongside 400 job cuts across EA.
Private equity buyouts often use borrowed money, with the acquired company’s assets used as collateral for the loans.
That can leave the acquired company responsible for repaying the debt, while limiting how much money the buyers put in and their financial risk.
Critics say some private equity firms also cut workforces and raise prices to extract profits, potentially weakening the businesses they buy.
BioWare’s closure has renewed attention on those risks, though no next steps are stated.
BioWare has closed, and 400 layoffs were reported across EA.
The studio developed the Mass Effect and Dragon Age games.
The closure followed an acquisition by new owners, identified in the article as Saudi Arabia and Jared Kushner.
PC Gamer says leveraged private equity buyouts can leave acquired companies responsible for repaying acquisition debt.
- Who
- BioWare, the developer of Mass Effect and Dragon Age.
- What
- The studio has closed, and 400 layoffs were reported across EA.
- When
- Not stated.
- Where
- Not stated.
- Why
- The articles do not state a specific reason for the closure.
This story does not have two clearly opposing sides.
Employees at BioWare began working on their resumes.
BioWare closed, and 400 layoffs were reported across EA.
- Studio
- BioWare
- Games
- Mass Effect and Dragon Age
- Layoffs
- 400 across EA
What people are saying
A leveraged buyout just means the company is bought using a combination of borrowed money, or debt, and private equity.
The purchased company's balance sheet is used as collateral against the loans taken out to purchase it.