Summary of Key Points
The Saudi Public Investment Fund (PIF) led the deal in collaboration with Silver Lake Capital and Kushner’s Affinity Partners, purchasing the gaming giant EA for $55 billion in cash (approximately 371 billion RMB). Kushner’s company only held a 1.1% stake and acted as a secondary investor, taking advantage of the opportunity. EA is currently facing challenges such as outdated intellectual property (IP), stagnant growth, and a hefty debt burden—annual interest costs exceed its net profit. The real purpose behind Saudi Arabia’s acquisition of EA is to realize its “Vision 2030” goal of diversifying from oil dependence and transforming the country into a global center for gaming and esports.
I. How Did Trump’s Son-in-Law Get Involved? – Through Middle Eastern Capital and Connections
Kushner’s Affinity Partners held only a 1.1% stake and played the role of a secondary investor, without participating in decision-making, due diligence, or negotiations. There are two main reasons for his involvement:
1. Most Funding Comes from Middle Eastern Wealthy Sources: Over 99% of Affinity Partners’ capital comes from Gulf sovereign funds; for example, the Saudi PIF provided $2 billion to them in 2021, with additional investments from the UAE and Qatar. In essence, Kushner’s company acts as a representative of Middle Eastern capital in the West.
2. Network Connections: Kushner’s American background and connections helped facilitate deals between Middle Eastern investors and Western companies. For instance, he played a key role in the Paramount acquisition of Warner Bros.; similarly, the PIF was willing to grant him a small stake in the EA acquisition, recognizing his ability to build bridges between the two parties.
II. EA’s Challenges
EA once thrived on popular IPs like FIFA, Battlefield, and The Sims, but now it faces difficulties:
- Overused IPs: Battlefield 6 is only a slight improvement over the failed Battlefield 2042; EA Sports FC has stable revenue despite losing its top-tier brand support; the new NFS games have seen significant sales declines, with resources reallocated to Battlefield development.
- Lack of New IP Innovation: There has been no new major IP released in five years, relying on past successes.
- Stagnant Growth: Revenue for the fiscal year 2026 was only 7.53 billion, showing a 1% increase, with annual revenue remaining stagnant between 7.4 and 7.6 billion; net profit decreased from 1.12 billion to 887 million.
III. The Debt Burden Behind the Acquisition
The acquisition comes with a substantial debt burden:
- Financing Details: Of the total $55 billion, the consortium only provided $32.5 billion in cash, with the remaining $20 billion borrowed by EA from banks (led by JPMorgan).
- High Interest Costs: At current interest rates, EA will have to pay annual interest of 1.8 billion—more than its net profit for the fiscal year 2026 (887 million). This means EA’s earnings are not enough to cover the interest.
- Cost Cuts and Layoffs: EA has pledged to cut costs by 700 million per year, including 170 million through layoffs. This will make game development even more challenging and may hinder the creation of new successful IPs.
IV. Saudi Arabia’s Strategic Move: Acquiring EA for a Post-Oil Economy
The PIF’s acquisition of EA is part of Saudi Arabia’s “Vision 2030” to diversify its economy:
- Gaming Industry Expansion: The PIF has already acquired stakes in companies like Nintendo and Capcom and invested in Scopely and Moutong Technology, but it lacked a core asset for producing high-quality esports content. EA’s games, such as Battlefield and Apex Heroes, fill this gap.
- Clear Goals: Saudi Arabia plans to establish 250 gaming companies by 2030, generating 50 billion Saudi rials in GDP and creating 39,000 jobs. EA is a crucial part of this initiative.
- Diverse Investments: The PIF is also investing in sports (acquiring Newcastle United and signing stars like Cristiano Ronaldo) and renewable energy (17 billion in photovoltaic and wind power projects) to build a sustainable economy beyond oil.
Conclusion
After the acquisition, EA will have to manage significant debt while helping Saudi Arabia realize its gaming ambitions. Kushner benefited from Middle Eastern capital and connections, while Saudi Arabia is betting on a future economic transformation. Whether EA can escape its debt-heavy situation and whether Saudi Arabia’s gaming vision will succeed depends on future developments. However, it is clear that this acquisition is not just a simple business deal but part of a broader national strategy.