EA’s $55 billion acquisition by Saudi Arabia moves forward.

Saudi Arabia’s Public Investment Fund (PIF) is making significant strides toward acquiring Electronic Arts in a staggering $55 billion deal. The European Commission has given the green light for the PIF’s purchase of EA, stating that it does not raise any competition concerns under the EU Merger Regulation. The Commission explained its decision by highlighting that the deal primarily involves the production and distribution of video games across mobile devices, PCs, and consoles, as well as the organization and commercialization of esports events.

The Commission determined that the transaction would have a minimal impact on competition in the relevant markets, and it underwent the standard merger review process.

Although the PIF’s acquisition won’t be finalized immediately, the European Commission was one of the last significant hurdles to clear. If the deal is completed, it will mark the largest private leveraged buyout in history, primarily financed through borrowed funds, and the second-largest deal in the gaming industry, following Microsoft’s acquisition of Activision Blizzard—a deal that has faced its own challenges, including recent layoffs of over 3,000 employees.

This transaction also involves private equity firm Silver Lake and Jared Kushner’s Affinity Partners as part of the buying group, marking Saudi Arabia’s latest venture into the gaming sector. The PIF already owns Savvy Games Group and has invested in major companies like Activision Blizzard, Capcom, Embracer Group, Nintendo, and Take-Two. Additionally, it holds a 97% stake in publisher SNK, known for releasing Fatal Fury: City of the Wolves last year.

While the Saudi government claims its entry into the gaming industry aims to diversify its oil-dependent economy, many view this move as part of its broader “sportswashing” strategy. The country has faced criticism for human rights abuses and alleged international crimes, including the assassination of journalist Jamal Khashoggi. To enhance its global image, Saudi Arabia has invested in various sports leagues, such as the Saudi Pro League and LIV Golf, and is now seemingly attempting to do the same with video games, hoping to shift perceptions toward entertainment rather than its controversial labor practices and anti-LGBTQ laws.

However, many gamers are skeptical of these intentions. Recently, the charity organization Games Done Quick (GDQ) retracted its sponsorship of an event with Metal Slug publisher SNK for the series’ 30th anniversary after backlash on social media regarding its ties to the PIF.

While EA’s leadership has stated that the company will “maintain creative control” under its new ownership, there are doubts about this assurance. The Saudi government seems to have influenced the development of Fatal Fury: City of the Wolves, which featured unexpected guest characters like soccer star Cristiano Ronaldo and DJ Salvatore Ganacci, both of whom have connections to Saudi Arabia (Ronaldo played in a PIF-funded league, and Ganacci has performed in the country). If the PIF successfully acquires EA, it will be interesting to see how long the company can retain its independence.

The kingdom is actively investing in or acquiring numerous gaming companies.