What happens when private equity becomes video gaming's 'final boss'

Private equity firms are poised to take over iconic video game maker Electronic Arts in a massive leveraged buyout. What happens when private equity owns the games you play.

Kyle Orland, senior gaming editor at Ars Technica. His article “EA will be a very different company under private ownership” was published at the end of September.

David Cole, CEO of DFC Intelligence. He is a video game, electronic entertainment analyst and market forecasting executive.

Joshua Rivera, culture writer and critic. His article in Vanity Fair “Why Did Jared Kushner and Saudi Investors Take Over EA Games?” was published at the end of September.

Michael Futter, founder of F-Squared. Former journalist, podcaster and analyst specializing in video games and electronic entertainment.

The version of our broadcast available at the top of this page and via podcast apps is a condensed version of the full show. You can listen to the full, unedited broadcast here:

Part I

MEGHNA CHAKRABARTI: This fall, three private equity firms made one of those industry shaking announcements. The firms are California based Silver Lake, which currently has $110 billion in combined assets. Saudi Arabia's government public Investment Fund, more than $920 billion in assets. And Affinity Partners, founded by Jared Kushner, son-in-law of President Trump. Affinity Partners has almost $5 billion in assets, most of which it has purchased using funds from Qatar and the Saudi government.

Now, these three big firms announced that they are buying a company in a monster $55 billion all cash deal. It is the largest leveraged buyout in U.S. history. The company, which was publicly traded, will soon be privately owned by the firms. So what company could command such interest, such a price tag?

Interestingly, it is not a computer or a chip maker. It is not a social media behemoth or a global retailer. It is not an AI unicorn. This company makes video games.

Back in December, specifically December 20th, 2011, Storm Troopers, the Rebel Legion, and Chewbacca himself stood on a dais in one of the world's largest financial markets. They waited patiently until they were joined by a man in a dark suit, crisp white shirt and green tie.

I hope a battle doesn't break out right behind me.

CHAKRABARTI: And in this moment, Rebel forces, the Empire and Chewie, instead of battling each other for the future of a faraway galaxy, stood united by a common goal.

Extremely delighted to welcome Electronic Arts and all the members from the Star Wars Group here to ring the opening bell at the NASDAQ market site.

CHAKRABARTI: Electronic Arts, the iconic video game maker, one of the best known in the multi-billion-dollar gaming industry. Company reps gathered to ring NASDAQ's opening bell that day for two reasons. One, to celebrate the change of its stock symbol from ERTS to simply EA. And two, to launch the company's BioWare game Star Wars: The Old Republic.

So on that day, December 2011, EA share price closed at $20.57. Just yesterday, 14 years later, EA stock will cost you 10 times as much. Closing price, $200.30. Electronic Arts first went public back in March 26th, 1990. The maker had already distinguished itself with famed game titles as noted by then.

EA Studio President, Frank Gibeau that day, December 2011.

FRANK GIBEAU: From games like FIFA and Madden, the Sims to Battlefield. We entertained families and friends from all over the world in all age ranges in all countries.

CHAKRABARTI: Before the bell rang, BioWare founders, Ray Muzyka and Greg Zeschuk thanked EA, the Star Wars franchise and the various studios and creators that helped make the game.

Then they offered a familiar blessing to those gathered at NASDAQ. And now here we are, 2025, and the announcement that those three private equity firms I mentioned are taking this wildly successful public company private in that leviathan $55 billion all cash deal. One analyst we spoke to called it "an almost irrational amount of money."

The deal is also producing a highly rational fear from the minds of some gamers, other market analysts and makers. Because they believe EA going private and by these three private equity firms in particular, could change the video game industry as a whole. So what does it mean when private equity has direct control of the games?

That's you play. Joining me first today is Kyle Orland, senior gaming editor with the Technology news and Analysis outlet, Ars Technica. And also, I should note, the former co-host of NPR's Press Start, a video game focused podcast that launched back in 2005. Kyle, welcome to On Point.

KYLE ORLAND: Hi, thanks for having me.

CHAKRABARTI: Okay, so let's go back to EAs beginnings. Tell us the origin story of this iconic makers, I've been calling it.

ORLAND: Yeah. Decades ago, EA really started as a kind of designer forward company. They had these full-page ads with black and white glossy photos of their developers. They were going to make artistic games that really stood apart from the pack.

But starting in the '90s, I'd say, they really found success with their sports games, Madden, FIFA, especially on consoles. And they found that they could release new versions of those every year, and make a lot of money doing it. People would buy the new game just to get access to the new player stats, the differences that had happened over the seasons, and the game didn't really have to change that much.

They could iterate on it a little and obviously add 3D and things as the years went on. But a Madden game, a FIFA game, it's pretty much the same year to year. Then you get into the 2000s, the online --

CHAKRABARTI: Kyle, let me just jump in here. Because the games that you just mentioned, Madden and what was formerly known as FIFA are, as you properly noted, wildly popular.

But I want to actually just talk about Madden for a moment more specifically because it is a game in which players control a team on their way to the Super Bowl, and some classic versions of the game in those early years included voiceover and commentary from John Madden himself.

Here's an example from a play in which the quarterback is rushed to throw and the path fails.

MADDEN COMMENTARY: Tell your line to protect here. Tell your line to protect every play, not just here. You need to get some time back there and let someone get open.

CHAKRABARTI: And by the way, I think the ... the 26th version of the game was just released this summer.

Kyle, I'd love you to tell me more about how much Madden in particular just changed the gaming world in terms of sports video games?

ORLAND: Yeah. Like I was saying, it's this kind of game that they release every year and people will buy reliably every year, even without having to do a lot of changes.

Compare that to even a big game like Battlefield 6 that takes multiple years to develop, and you really have to add something new to convince people to upgrade from Battlefield Five, for instance. These sports games were a real, reliable money maker for them. But it got supercharged in the new millennium.

Once all these consoles and players were online, they found that microtransactions, as they say, small purchases of little content could really drive things even further. Especially in FIFA. There's this feature called Ultimate Team. You basically buy collectible digital trading cards that represent players of different international sports franchises.

And if you get lucky and get one of the rare superstars, their stats actually can be folded into the game. And then your players are more powerful when you're playing online against others. A lot of people will put a little bit of money into it.

But then there are these whales that will put thousands and thousands of dollars chasing those rare cards, having to have the best team for online competition. And it's those whales that have really driven revenues in EA into the stratosphere. And it's, I don't want to say an infinite money cheat or anything, but it's a way.

EA doesn't have to spend a lot of money creating these digital cards. It's just a copy of digital code, but they bring in so much revenue that it's become attractive to private investment, apparently.

CHAKRABARTI: Okay. Interesting. Going back to, as you said, the early 2000s, just to highlight a couple of things.

You talked about consoles and then people being able to play each other across the internet. And there was also something. And correct me if I'm wrong, that EA did with Madden in particular, because a new version of it came out every year with stats and things from players, from actual NFL players.

And so in order to get access to that information and use it in the game, you actually had to pay every year. Was that a novelty back then for video games or was EA following a model that had already been set?

ORLAND: It's the kind of thing that made sense. If you had last year's game and then there was a trade and one big player went to another team, then you're playing the old version.

You're like, oh this isn't reflecting what I'm seeing every Sunday on my TV, for instance. So people are going to want to upgrade for that reason. But also, for a while there were a few competing NFL games, but then when the last one dropped out, EA kind of had a monopoly on the Madden, the NFL license for a while.

So they were the only ones where you could get real players and real teams. There were other football games that were wackier and had fake teams in them. So if you really wanted, so that relationship with the NFL, that kind of exclusive relationship really paid a lot of dividends over the years as well.

CHAKRABARTI: Right. So does the company still have, these few decades later, still have that reputation for being a place for like creative ideas in the video game space?

ORLAND: They still have, you said creative ideas? I think you dropped out there for a second.

CHAKRABARTI: Oh, sorry. Yeah. Like you talked about it as in the early days it was seen as this really innovative gaming company.

Do they still have that reputation?

ORLAND: No. I'd say right now they're more focused on these big franchises they can release every year or every few years. Madden, FIFA, which is now called EA Football Club, The Sims, Battlefield, those are the bread and butter. They have a little bit of investment in a few indie games and trying to branch out into these original investments.

But by and large, it's the company you go to for reliable franchises these days.

CHAKRABARTI: Okay. So then how large is it though, as a company in the video gaming industry?

ORLAND: It's a hundred-pound gorilla out there. These big games, like I was saying, microtransactions will drive a lot of revenue without a lot of need for investment in creating an original game from scratch. They have a leg up because they have all these franchises that they've invested decades into. And that brand recognition will get people to buy the new version every year and to invest, sometimes hundreds, thousands of dollars into getting these microtransactions that let them compete with opponents.

Part II

CHAKRABARTI: Kyle had in the previous segment talked about some of EAs biggest named games. We talked about Madden in the world of football. We also talked about what was formerly known as FIFA. It was recently renamed EA Sports FC, after Electronic Arts was unable to extend a partnership with soccer's global governing body.

But if you are familiar with the game, you are certainly familiar with this type of commentary from one of, what was formerly known as FIFA's many iterations.

(FIFA COMMENTARY) 

CHAKRABARTI: Sound from Electronic Arts. Very famous and popular soccer game. Kyle, from your reporting and discussions with people in the industry, why do these three companies want to buy EA.

ORLAND: So there's a few things, but one of the biggest I'd say for Saudi Arabia, in particular, is the cultural impact of owning a company like EA.

They have already an interest in many video game companies and especially eSports areas. And these sports games are wildly popular in the Middle East, but also around the world. So having an investment into a company like this, that has such an impact on the culture, I think it's a soft power move by the Saudi government.

Having an investment into a company like this, that has such an impact on the culture, I think it's a soft power move by the Saudi government.

Kyle Orland

I was talking earlier about EAs relationship with the NFL for instance, Saudi Arabia, if they own part of EA, that gives them a way to talk to the NFL and say, Hey, what if we won a football game in Saudi Arabia, for instance? We could give you some preferential treatment in the next Madden game.

That kind of horse trading is possible when you have your fingers into a big cultural pillar like EA sports.

CHAKRABARTI: Okay, Kyle, hang on here for just a second because I think it's time for us to also get a better sense as to what these three private equity firms are. And we'll start with the Saudi government's public investment fund.

And to do that, let's turn to David Cole. He is the CEO of DFC Intelligence and is a video game, electronic entertainment analyst and marketing forecast executive. Joining us from San Diego, California. David, welcome to On Point.

DAVID COLE: Hello. Thank you, Meghna.

CHAKRABARTI: So I'd love to actually get a little briefing book about these three private equity firms, and let's start where Kyle left us off, with the Saudi Government's Public Investment Fund.

I said earlier that it's got more than $920 billion in assets. This is a mind-boggling sum. What are some of the other things they've purchased? Is this their first foray into the world of the video gaming industry?

COLE: It is definitely not their first foray into the video game industry. They are very active in terms of investing in video games.

So they have set up their own company Savvy Game Groups, which has bought, they bought Scopely, is the largest deal they bought, which created the highly successful Monopoly Go! mobile game. Which has made them billions. They also recently purchased I think it was through Scopely, Niantic, which is known for Pokémon Go, which was eight or nine years ago, all the rage in the mobile game space.

Is where you went around the live environments and caught Pokémon. They've also made many investments in, minority investments in companies they owned. Previously they owned, I'm talking about under 10% of EA, also Activision, before was purchased by Microsoft, Take-Two. Even Nintendo and Capcom and some of the Japanese companies. So they have made video games front and center of some of their investments.

CHAKRABARTI: Oh, that's really interesting, David. Okay. Now, this public investment fund has actually been in the news a lot recently for a couple of reasons.

One, the current Saudi government has a reputation for doing things like killing journalists. And we've actually even done some shows about how the Saudi government, to Kyle's earlier point, has done things like had major sporting events in the country as an effort to, as some call it sportswash its reputation. Do you agree with Kyle or disagree with him about how maybe the Saudi government is trying to do something similar here with Electronic Arts? Or is it just simply a great business move for them?

COLE: I think it's part of the Saudi government's efforts to really expand their culture and get into more of the sports and get more in the international scene.

I think another big investment worth noting is the LIV Golf, which, LIV Golf, which is the Roman numeral for 54, which is designed to compete with the PGA in golf. And so I think the attraction is, Hey, let's bring international sports in, maybe look to change their reputation.

Saudi Arabia is a very younger demographic. A lot of young people there, they want to expand there. I think, beyond oil, which is of course what they're known for, getting more into the international scene. And I think sports when you look at it and especially if you look at EA, sports and video games are two of the big things that I think a younger crowd attracts.

And I think they'd like to bring NFL events over, eSports, NASCAR if they could. Obviously golf. So I think I look at it that way, in the sense that the Saudi Arabia government is hopefully being an optimist, is trying to overcome some of their past poor reputation. For some of these things.

CHAKRABARTI: So then we have Affinity Partners, right? Founded by Jared Kushner, son-in-law of President Donald Trump, which in its five-ish billion dollars in assets under management is like a small fry in comparison to the Saudi Public Investment Fund.

But interestingly just what last year or so, Affinity Partners got a big boost of cash from the Saudis and also the Qatari government. Does Affinity Partners, have they been in the video gaming space before?

COLE: No, this is their first foray, I believe, into the space. And they're a fairly new player in the space.

And so I think that's, as you said, their biggest investor is the Saudi PIF. It's clearly they have close ties on that end of bringing 'em in the deal. And it'll be interesting to see what role they might be able to play in terms of helping ease the deal through government regulations and things like that, which I think, when you get a deal of this size involved, there's always going to be government scrutiny.

CHAKRABARTI: It helps to have the president's son-in-law then as --

COLE: It does help. I think that can be a pretty good connection there.

CHAKRABARTI: Kyle, did you, I'd love to have you jump in here about if you have more thoughts about Affinity Partners or even the Saudi PIF?

ORLAND: No, I think what's been said is pretty accurate.

Having Jared Kushner involved will definitely smooth things along. I know when Microsoft recently had a major deal to absorb Activision. It was held up in regulation approval internationally and in America for months, if not years. Anything you can do to smooth what will obviously be some sort of oversight by the government, is going to really help things out.

Having Jared Kushner involved will definitely smooth things along.

Kyle Orland

CHAKRABARTI: Yeah. Okay. So, David, let's again just to round out our understanding of these three private equity firms. Then of course, there's Silver Lake. California based long history in investing or purchasing tech companies, right?

COLE: Exactly. Well established private equity firm that has been around for years.

They do not have too many investments in the video game space. They have invested in Unity, which is a company that makes game engines that are basically the tools that developers use to create the games. Other than that, they have very traditional investments in a whole wide range of stuff. This is obviously a major foray into video games, but clearly, they're the well-established traditional private equity firm, I would say.

CHAKRABARTI: Yeah. Okay. I'm looking right now at Electronic Arts current market cap. It's $49.99 billion. It's $50 billion. So that $55 billion price tag obviously now makes more sense. But David, what's your reaction to this? The fact that it is so large and an all-cash deal. Is that unusual?

COLE: It is the largest LBO in history, I think. I would argue though, that in 1988, RJR Nabisco was acquired when in LBO for $25 billion, I would say $25 billion in 1988's probably more than $55 billion today. But still, this is obviously a huge deal, and I think that's obviously, it's $35 billion in equity from the private equity investment firms, and then $20 billion in debt.

So there will be that large debt that that is being taken on. But I will note that I don't think, I think the debt when the RJR and Nabisco was much higher in terms of the ratio.

CHAKRABARTI: Okay. Now David, you brought up something really important and Kyle, you've reported on this in Ars Technica. This deal, to be clear, includes $20 billion of fresh debt, which is coming from JP Morgan that will help finance this buyout. So it's EA as a company that will be saddled with this debt, correct.

ORLAND: Yeah, that's correct. And from my reporting, it could cost about a billion dollars a year in their bottom line to just service this debt.

Now, that's not a ridiculous number for EA. They make multiple billions of dollars a year in profit, but when you have that hole there, I think it's going to refocus the company a little bit. They're going to be more committed to the most profitable parts of the business. These things like Ultimate Team and microtransactions. And probably less interested in these single player games that can take years to develop and they can be beloved by gamers and sell very well and make a profit.

But when it comes to the margin, making that money as quickly as possible, I think you're going to probably refocus on the big franchises and might lead to divestment or layoffs in companies like BioWare Codemasters that are not quite as profitable.

CHAKRABARTI: Kyle Orland, a senior gaming editor at Ars Technica.

Thank you so much for joining us, Kyle.

ORLAND: Thanks for having me.

CHAKRABARTI: David Cole. Picking up on Kyle said, more specifically in his reporting, he also points out that Electronic Arts brought in almost $6 billion in gross profits in the 2025 fiscal year. So maybe making that billion dollars in debt service payments annually won't be that hard, but maximizing profits now, also for those new three owners that it has, would be the challenge.

And I think this is why a lot of people are concerned about the ripple effect, both in terms of game development and financially throughout the larger video game industry from this deal. Do you have those same concerns?

COLE: Obviously there's always concerns when you have an acquisition of that type. And I think layoffs have hit the video game industry very hard in recent years. And so there's a lot of concern about, will this lead to more layoffs, closures? My thinking is that, like you said, they want to maximize the amount of profits and so they're gonna be more in a position where they wanna sell some of their franchises.

Layoffs have hit the video game industry very hard in recent years. And so there's a lot of concern about, will this lead to more layoffs, closures?

David Cole

That's, like Kyle said, maybe more single player, not as focused on sports and look for the highest purchaser. So it could be an opportunity for growth. Because some of these franchises that may have not been getting the love and attention that they did in the past from EA. Because EA was too focused on the bigger sports games and Sims and stuff like that.

They may find a new owner that may be a smaller company, but may give some more love and care to these franchises. I see a flip side of that, if you have companies who are willing to invest in those established franchises, that could be an overall growth for the industry.

If you have companies who are willing to invest in those established franchises, that could be an overall growth for the industry.

David Cole

Obviously, there's going to be concern of something like this. And I think, I try and look on the bright side. EA has a lot of these older franchises that were just not getting that love and attention. And so if they spin those off and find, instead of just closing 'em down, I mean that's the other alternative. Just close 'em out, but then you don't make any money.

CHAKRABARTI: So that's really interesting. Because you were hitting on something that I was just about to ask you, David, which is in other industries in the past when private equity firms have taken over them.

There's been a lot of focus on how, in several examples, those private equity firms essentially just treated the company they bought as a credit card. Saddling it with a lot of debt and then making their money back or making a profit off just selling off parts of the company.

That's how we've had some very big retailers, for example, just disappear off the face of the earth. But you're saying that this IP sell off, if it happens with Electronic Arts, could actually revive potentially some of like smaller games that EA hasn't been paying as much attention to as it's grown.

COLE: Yeah, I think that's exactly what I'm saying. I think with the Saudi Arabia government having a very strategic reason for investing in this, it's a little different than maybe some of the past buyouts we've seen. I think they're very focused on obviously the sports category and eSports and that's gonna be their primary focus.

And I think they're looking at it from a long-term strategic perspective. And I think that makes it a little different than what we've seen in the past. I think that's, obviously they're going to be looking for as much money as possible, and they got some of these franchisees, well, that's not part of our strategic focus.

Let's find someone else who can buy that franchise out. And, take it there. BioWare is a perfect example. That's a company that specializes in more of these single player role playing game type of products. They take a long time to develop. They have a smaller audience.

They can be quite profitable, but it might not be their core focus, but there might be some other companies out there who want to really take those franchises and run with it.

Part III

CHAKRABARTI: Back to our conversation about the $55 billion, all cash leveraged buyout of Electronic Arts Incorporated.

One of their biggest non-sports games is called Mass Effect. It's a game owned by EA, but produced by BioWare. That studio we talked about earlier, it's a sci-fi saga where humans and various alien civilizations have colonized the galaxy. The show has a third person shooter and roleplaying elements.

(GAME PLAYS)

Something's moving over behind those crates.

Wait don't shoot. I'm one of you. I'm human.

Sneaking up on us like that nearly got you killed.

I am sorry I was hiding from those creatures.

My name's Powell. I saw what happened to that Turian. The other one shot him.

CHAKRABARTI: A little bit of sound from a Mass Effect there.

Now, this purchase by the Saudi Public Investment Fund, by Affinity Partners and Silver Lake has actually set off several alarms in the global gaming community. We heard from some of you on Point listener, John Watras is a 50-year-old gamer in Charlotte, North Carolina. He says he's really unsettled by the deal.

JOHN WATRAS: It's just terrible knowing that the Saudi government is going to get involved. The same Saudi government that has been documented to have murdered journalists. And then Kushner with his dealings with them. I do not trust it and therefore I doubt that I will ever buy an EA Sports game again.

It's just terrible knowing that the Saudi government is going to get involved. The same Saudi government that has been documented to have murdered journalists.

John Watras, On Point listener

CHAKRABARTI: Here's On Point listener Michael Mirtica, and he says he's heard a lot of chatter in the Sims playing community and noticed that some high-profile players have said they'll stop playing. So he has a concern. That's also a common point of criticism following the deals announcement.

MICHAEL MIRTICA: There's a lot of worry about equity, equality, and human rights and just all the things that play into this, especially with the representation in the Sims particularly, and how yeah, those representation of controversial issues, [LGBTQ] are visible in the game, and how is that going to change?

There's a lot of worry about equity, equality, and human rights.

Michael Mirtica, On Point listener

CHAKRABARTI: Okay, joining us now is Joshua Rivera. He's a culture writer and critic, and he wrote about the EA private equity deal in Vanity Fair, and he joins us from Philadelphia. Joshua, welcome to On Point.

JOSHUA RIVERA: Hi, Meghna. How are you?

CHAKRABARTI: I'm doing great. Thank you so much for your patience in listening as we went through the financial details of the deal and the background on Electronic Arts. Because it really helps us get a deeper understanding of why there is this surge of concern from various corners of the gaming community.

What evidence do you see, Joshua, that especially the Saudi governments ownership of Electronic Arts, could lead to some of the things that our listener just said, like perhaps making the Sims a less welcoming space for a diverse community of players.

RIVERA: Yeah. I think it's important to understand that people identify very strongly with video games, the games that they play, generally because like you spend more time with them than you do in most other media, right? A movie's done in two hours. You watch a show an hour at night.

With a game, you can play indefinitely, and the amount of time and personal emotional investment that you have in that can be extreme.

And so if you find that you, an expression of some marginalized identity that you might share with others, and that this place is a place to celebrate that, then yeah, you can feel threatened and these things tend to be when money is involved, the first thing's on the chopping block.

Because they are not considered to be primary drivers of revenue.

CHAKRABARTI: Interesting. Because I actually was wondering if it's the exact opposite, that if revenue is the overall goal and not the soft cultural power, which I want to hear more from you in just a second, then why make any move that would reduce the attractiveness of a game to a huge number of players?

RIVERA: It's counterintuitive. And I'm not saying that this is logical, right? It's very much like a conservative reflex, right? Because games are also, in an incredibly fraught space, culturally, right? We just heard from listeners who are actually, they're quite reasonable.

They're expressing their concerns in valid ways. And I'd say those concerns are extremely valid. But a lot of people in the gaming community are not reasonable and quite hostile in their articulations of what they care about. And can see other marginalized groups being celebrated or representing these games as a threat to them. It becomes a culture war touchpoint, and culture war can make money people scared.

CHAKRABARTI: Yeah. Just to underscore why this matters, not only as you said Joshua, do people spend a lot of time playing video games. It is a space that they enter happily and spend hours in them at a time, but it's also, the industry as a whole is larger than Hollywood.

So when things change in the gaming industry, it really does have a pretty big ripple effect. With that in mind, you wrote about the Saudi government's recent push in a lot of different entertainment related spaces. Connect those together. And how that then brings in the EA deal into the Saudi government's overall, I don't know, what its strategy is with its public investment funds dealings in recent years.

RIVERA: Yeah. Like we heard from Kyle and David, there are additional investments, over the past four years, like David had said, there have been a tremendous number of investments in the gaming space.

LIV Golf is important. Formula One also important, the Qatari Grand Prix is a regular event. And it's one of, what, 20 odd races in a Formula One season. So that is a very, that's a prominent event. There was also last month the Riyadh Comedy Festival, where they brought a bunch of comedians over to do a set, and they paid them enormous sums of money.

And basically, it came out that there were conditions to not talk about the government or Islam. And this was like a whole thing, where just these comedians are coming over there and to this oppressive regime. And to what end, what does the Saudi Arabia have to gain from that. I can tell you standup comedy is not a money maker on the levels that we're talking about with games or sports, right? It's very much an exercise in that soft power that we were talking about.

CHAKRABARTI: So interesting how they're doing this.

I remember Lionel Messi, right? The global, maybe the number one soccer player in the world, at least as of the last World Cup. Now, he's not playing on a Saudi team. But he does have this $25 million brand ambassador essentially deal with the Saudi government where he has to do 10 social media posts a year about Saudi Arabia. Promoting Saudi Arabia. And he gets $25 million for that. The only, one of the only major stipulations is he can't say anything that would tarnish Saudi's reputation. That's, on the one hand, it's brilliant, right? Because I don't know how many million people follow Messi online.

But on the other hand, it is another example of what you were talking about. But do, back to video games though. Do we have evidence that it may be in the other entertainment spaces. Movies for example. Because they're making a lot of investment in movies, that political or regime-based priorities are making their ways into the companies that they own.

RIVERA: There is, I would say there's no hard evidence. And I would say a consistent factor in all this is that there's this this level of like plausible deniability, right? And that's what makes it so troubling. There is, like I was saying before, I'm sorry, it looks like you had something to say.

CHAKRABARTI: No, please. Go on. Go on.

RIVERA: Okay. Yeah. With the, like I was saying before, there's this sort of like conservative impulse in gaming and entertainment industries, where people wonder, it's the right-wing talking point. It's not really based on anything, but get woke go broke is what they say.

And there are people invested in the idea that if you cater to a diverse demographic that you are selling out culturally, so to speak, right? And also just again, because culture war is bad for money. There's a good example about this actually.

Independent reporter Stephen Totilo just broke news in the last month about Assassin's Creed, a popular stealth action game. That's historical fiction, right? And set in different eras. Each game is set in a different era, and they were recently considering a game set in Reconstruction America that was canceled. And one of the reasons cited was the political climate in the United States.

That is likely not the whole story, right? There are all sorts of reasons why an expensive video game will not come together. But there is enough evidence of just culture war being bad for business.

And so if someone on a right wing media outlet is likely to see a thing that you're doing, in the arena of like diversity or LGBTQ issues, if it's likely that you're going to become a huge story and that people are going to talk about boycotting you or getting others not play your games, then like, why would you do that? Like, why would you court that?

CHAKRABARTI: There's another why question here, and you actually wrote about it in Vanity Fair, Joshua.

You write that the video game industry as a whole right now is actually in trouble.

RIVERA: Yes.

CHAKRABARTI: Tell me more.

RIVERA: This is the other thing that makes this purchase interesting. Because people are not buying traditional video games. And by traditional, like any other in product, right?

They put out a title. Any year, you buy that thing, you bring it home, you play it, you buy another one. People aren't buying those kinds of games anymore. What they're doing is they're playing games that are often free to start. Games that, if you have children, they probably play Fortnite or Roblox.

And these games are free to play, but they use, they have extensive use of what Kyle was talking about, the start of the show microtransactions, where like you buy costumes and other like digital trinkets to show off to your pals. And that is where all the money is right now.

And there's so much money in it, that there's little reason really to develop these expensive games that you buy once and then play, and maybe they can sell you a sequel or something called an expansion, which extends that a little bit. But why do that?

Why have this thing where there's just one or two points of purchase when you can just perennially extract money from people?

CHAKRABARTI: Is this one of the reasons why we've been seeing all those layoffs in the industry as we touched on before?

RIVERA: That is part of it for sure. The other part is that outside of this private investment, this private equity buyout, private equity has been buying games companies for the last five years, it's been a huge run on them.

And they do use these game companies as, like you said earlier, like credit cards. And so we have seen wave after wave of studio closure for companies that may have made games that were profitable, that they sold. They just didn't sell enough, or it was more viable for the owners to just saddle them with debt and get rid of them.

CHAKRABRATI: Let's hear quickly from another analyst about the layoffs. This is Michael Futter. He says, future layoffs could come because of EAs new owners, and like other acquisitions, decisions are presented as the consequence of changing market conditions.

MICHAEL FUTTER: That can mean anything, and they don't have to point the finger directly at the government and say tariffs did this. Oh, it's just changing market conditions. And especially when you're Microsoft, who's laid off, I think it was something like 15,000 people and is now a private donor to this East Wing ballroom project, layoffs paid for that, and it's a bribe. All of these private companies are bribing the current administration to get their way, and at the same time, they're laying people off.

It's hard not to draw a straight line between layoffs and the money available to pay for these bribes.

All of these private companies are bribing the current administration to get their way.

Michael Futter

CHAKRABARTI: Joshua, do you have a response to that?

RIVERA: That's, it invites that reading, it absolutely does. One of the problems with Microsoft in particular, like you start to ask questions about like where their corporate priorities are.

And it doesn't seem to be making video games. Despite having spent much of the last five plus years buying video game studios. They're interested in artificial intelligence, and they're interested apparently in funding the East Wing Ballroom.

The first draft of this transcript was created by Descript, an AI transcription tool. An On Point producer then thoroughly reviewed, corrected, and reformatted the transcript before publication. The use of this AI tool creates the capacity to provide these transcripts.