According to Kotaku, Electronic Arts faces a credit rating downgrade to junk status following its $55 billion acquisition by Saudi Arabia's Public Investment Fund, Jared Kushner's Affinity Partners, and Silver Lake. Bloomberg reports that S&P Global Ratings plans to cut EA's credit grade from its current "BBB+" rating to non-investment grade territory. The downgrade will occur when the deal closes next year.

The transaction requires EA to take on approximately $20 billion in debt financing from JPMorgan Chase. This represents the largest leveraged buyout in corporate history. Moody's Ratings announced a similar review of EA's creditworthiness. The company's shares traded at $210 per share under the deal terms, representing a 25 percent premium over pre-announcement prices.

Immediate Consequences for EA Operations

The debt burden creates pressure on EA's operations and workforce. Employees told media outlets they expect cost reductions and potential layoffs once the deal closes. One EA employee stated the transaction shows how many workers became collateral for executive enrichment. The company released an internal FAQ claiming no immediate changes to jobs or daily work would result from the acquisition.

ABC News notes that leveraged buyouts typically leave acquired companies liable for servicing new debt through their income. EA's annual revenues have remained flat between $7.4 billion and $7.6 billion over the past three fiscal years. The company must now generate sufficient cash flow to service its new obligations while maintaining development budgets for major franchises like Battlefield, Madden NFL, and The Sims.

Industry Concerns About Studio Independence

BioWare, EA's RPG studio behind Mass Effect and Dragon Age, faces particular uncertainty. Former BioWare project director Mark Darrah said studios with progressive track records may not align with new ownership values. He questioned whether BioWare could reverse its messaging without damaging public perception. The studio recently downsized after Dragon Age: The Veilguard underperformed commercially.

Insider Gaming reported EA previously considered selling BioWare, which EA acquired for $775 million in 2007. Current developers expressed concerns about further downsizing. Saudi Arabia prohibits same-sex relationships and restricts LGBTQ+ expression through law. EA has not reaffirmed its 2022 commitment to trans rights since announcing the sale. CEO Andrew Wilson stated company values would "remain unchanged" but provided no specifics about diversity policies.

Global Gaming Investment Patterns

Al Jazeera reports this acquisition continues Saudi Arabia's expansion into gaming. The Public Investment Fund previously spent $4.9 billion acquiring Scopely in 2023 and $3.5 billion purchasing Niantic's gaming businesses in 2025. The fund already held a 9.9 percent stake in EA before the buyout. Saudi Arabia's gaming investments are part of economic diversification beyond oil dependency.

Private equity involvement in gaming has increased as public company valuations declined. Industry analysts expect more leveraged buyouts as borrowing costs decrease. The EA transaction differs from traditional M&A deals because it saddles the company with significant debt rather than leaving it debt-free under new ownership. This structure shifts financial risk from investors to the operating company and its employees.

Regulatory approval appears likely despite the transaction's scale. Sources told Financial Times that connections to the Trump administration through Kushner provide a favorable regulatory environment. The deal requires shareholder approval and clearance from competition authorities. Analysts expect fewer obstacles than Microsoft faced acquiring Activision Blizzard in 2023 because this transaction involves financial buyers rather than a direct competitor.

Further Reading

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