Xbox Leader Highlights EA’s $55 Billion Valuation as a Sign of Gaming’s Role in Today’s Entertainment Landscape

One of the most significant developments in gaming this year is the announcement of EA’s $55 billion sale to a group of investors, including Saudi Arabia. This news has sent ripples through the gaming community, prompting comments from Matt Booty, Head of Xbox Game Studios. He noted that the hefty price tag underscores the immense growth of video games within the global media landscape. “Games have really become a foundational part of entertainment,” Booty remarked. “And as such, I think we’re seeing these valuations and transactions that really reflect their place in modern entertainment.” He emphasized that the sale price “reflects the value that exists in all of” EA’s gaming IP, which includes popular franchises like Madden, FC, and The Sims. Booty added, “I’m certainly not [a mergers and acquisition] expert, but I would look at the value of the transaction really being about the forward-looking value of the IP and the stories and what they’ve created, even more so than necessarily, the static or rearward-looking value.”

Microsoft has a history of major acquisitions, having previously acquired Mojang and Minecraft for $2.5 billion, ZeniMax for $7.5 billion, and Activision Blizzard for $75.4 billion. If the EA deal goes through, it would mark the largest Leveraged Buyout (LBO) in history, taking EA private. The Saudi Public Investment Fund would hold over 93% ownership of EA, with Jared Kushner’s Affinity Partners and Silver Lake taking the remainder. EA is also expected to contribute $20 billion to the deal, raising concerns about potential cost-cutting measures, including layoffs, studio closures, and asset sales. While the sale is not yet finalized, it is anticipated to close in 2026, pending regulatory approval and other conditions. A group of EA employees has voiced their opposition to the sale, arguing that it is unnecessary and detrimental to workers. There are also worries that the PIF may attempt to steer clear of “the gay stuff” and political issues if the deal is completed. EA has acknowledged that the pending sale could negatively impact its ability to attract, retain, and motivate developers.