Ahead of an anticipated decision from federal regulators regarding Saudi Arabia’s Public Investment Fund’s proposed $55 billion purchase of Electronic Arts (EA), the company has introduced another wave of layoffs. These cuts affect those in customer support, trust and safety, recruitment, and IT sectors. This follows a trend seen throughout the gaming industry as companies consolidate and reorganize, aiming to enhance margins.
European Union regulators are to finalize the acquisition’s terms soon, while U.S. counterparts edge closer to a decision. The gaming industry has seen countless job losses, particularly among developers, artists, engineers, and support staff. Recent reductions at EA have impacted roles crucial in player support and community moderation. Such positions, though not always spotlighted, become immediately noticeable when they’re missing.
Among gamers, discontent has been mounting. Members of the Players Alliance, like myself, have noted concerns over layoffs, price hikes, subscriptions, microtransactions, and an apparent push for increased player spending. Many question if decision-makers in gaming remain in touch with their communities.
The opposition to EA’s acquisition spans beyond activist circles, with nearly 100,000 gamers nationwide voicing concerns. Senators Elizabeth Warren and Richard Blumenthal have advocated for scrutinizing the transaction, citing foreign influence concerns, alongside Saudi Arabia’s investment fund’s involvement.
Over 40 House Democrats have encouraged regulators to evaluate the deal’s effects on workers, competition, and labor markets. Their efforts highlight how owner structures impact more than just investors, touching workers, consumers, and communities.
Key in the debate are incentives. Proponents argue new ownership could offer resources, stability, and long-term investment. Yet, the history of leveraged buyouts often involves layoffs, restructuring, raised consumer prices, and increased monetization efforts. This is evident as gaming companies increasingly adopt subscriptions, premium upgrades, microtransactions, and recurring revenue models.
The Federal Trade Commission has pressed for competition policies that consider labor impacts, vital in gaming where consolidation affects employees and creatives before financials show. Serious consideration is warranted by the Committee on Foreign Investment in the United States, established to scrutinize foreign government-backed transactions involving American companies.
Though EA doesn’t manufacture defense products, as a top entertainment entity, its reach extends to over 100 million monthly users. Whether regulators resonate with the concerns of Warren, Blumenthal, and lawmakers, a thorough public review is essential.
This situation transcends one entity’s acquisition, touching broader consolidation concerns, labor conditions, consumer welfare, and financial institutions’ sway in culturally vital industries. As an active participant in gaming communities, my hope is for regulators to evaluate if this acquisition alleviates or compounds existing issues. Currently, the trend of layoffs, consolidation, and consumer strains suggests further scrutiny of private-equity-backed purchases.
Thus, the Federal Trade Commission and the Committee on Foreign Investment in the U.S. should examine the deal critically. If evidence aligns with gamer, worker, and legislative concerns, they should reject the acquisition.
Otis East is affiliated with Players Alliance.
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