Bloomberg Tech EA Agrees to Largest Leveraged Buyout in History
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Sep 29, 2025 Electronic Arts makes headlines with a historic leveraged buyout, prompting discussions on the future of the gaming industry. Huawei is set to boost production of advanced AI chips to challenge Nvidia's dominance. Meanwhile, Peloton aims to revive its brand with innovative AI software and new hardware. With insights on investor appetite for private ownership and creative risks in gaming, the episode dives into the shifting landscape of tech and investment.
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EA's Record Leveraged Buyout Explained
- The EA buyout values the company at about $55 billion and is structured as a leveraged buyout with significant bank debt support.
- Silver Lake, Saudi PIF and others are backing the deal while JP Morgan provides roughly $20 billion of financing.
EA's Revenue Shift To Live Services
- EA now derives roughly 75% of revenue from live services and microtransactions rather than product sales.
- That revenue mix signals maturity and predictable cash flow rather than rapid growth potential.
Circular Financing Masks Vendor Risks
- Vendor circular financing (equity or capital flowing back into vendor product purchases) hides margin protection and reduces negotiation.
- Such structures can prop up high margins but create fragility if antitrust or funding shifts occur.