Key Takeaways
- • BioWare's closure follows its acquisition by a Saudi Arabia-backed owner group that includes Jared Kushner, with roughly 400 layoffs across EA reported alongside the studio's shutdown.
- • The article argues that leveraged buyouts place debt on the acquired company's balance sheet, shifting repayment risk from the private equity firm to the target's workforce and assets.
- • EA's roughly $20 billion loan from JP Morgan illustrates the scale of debt that the acquired company must service after a leveraged buyout.
- • According to a cited S&P-based report, private equity-backed companies accounted for more than 10% of corporate bankruptcies in 2024 and over 50% of bankruptcies with more than $500 million in liabilities.
- • Gaming examples cited include Splash Damage and Gamepires, where layoffs followed private equity acquisitions within months.
Summary
PC Gamer's analysis frames the closure of BioWare, developer of Mass Effect and Dragon Age, as the latest consequence of private equity ownership. The studio's new owners, which include Saudi Arabia and Jared Kushner, were described as unlikely to favor the studio's approach, and employees reportedly began updating their resumes once the acquisition was announced. The article argues, however, that the outlook would have been poor even under conventional investors, because of how leveraged buyouts operate.
In a leveraged buyout, the acquisition is financed largely with borrowed money, and the target company's assets serve as collateral. Quoting Kiplinger senior investing editor Karee Venema, the article notes that the buyer limits its own capital at risk while repayment becomes the acquired company's obligation. In EA's case, the article cites a $20 billion loan from JP Morgan. The article says private equity firms have been criticized for tactics such as cutting workforces, raising prices, selling real estate and intellectual property, and using sale-leaseback arrangements. It also describes standard "2-and-20" fee structures, with a 2% annual management fee and 20% carried interest, plus additional monitoring and transaction fees.
The article cites a report using S&P data showing private equity-backed companies accounted for more than 10% of corporate bankruptcies in 2024, and over 50% of bankruptcies involving more than $500 million in liabilities, while noting such firms often emerge financially unscathed. Venema is quoted citing the 2017 Toys 'R' Us bankruptcy, while also pointing to successful buyouts such as Hilton and Dell. In gaming, the article points to Gamepires laying off staff about eight months after its acquisition by the Emona Capital-backed Splash Damage Group, and to Splash Damage's own layoffs in November 2025.
On EA's outlook, the article reports that development continues on Marvel's Iron Man, the next Star Wars Jedi game, and a Sims project codenamed "Project Evergreen," while EA Sports titles and Battlefield 6 and Apex will continue to receive support. The article suggests EA's capacity to fund less mainstream development may be limited.
In a leveraged buyout, the acquisition is financed largely with borrowed money, and the target company's assets serve as collateral. Quoting Kiplinger senior investing editor Karee Venema, the article notes that the buyer limits its own capital at risk while repayment becomes the acquired company's obligation. In EA's case, the article cites a $20 billion loan from JP Morgan. The article says private equity firms have been criticized for tactics such as cutting workforces, raising prices, selling real estate and intellectual property, and using sale-leaseback arrangements. It also describes standard "2-and-20" fee structures, with a 2% annual management fee and 20% carried interest, plus additional monitoring and transaction fees.
The article cites a report using S&P data showing private equity-backed companies accounted for more than 10% of corporate bankruptcies in 2024, and over 50% of bankruptcies involving more than $500 million in liabilities, while noting such firms often emerge financially unscathed. Venema is quoted citing the 2017 Toys 'R' Us bankruptcy, while also pointing to successful buyouts such as Hilton and Dell. In gaming, the article points to Gamepires laying off staff about eight months after its acquisition by the Emona Capital-backed Splash Damage Group, and to Splash Damage's own layoffs in November 2025.
On EA's outlook, the article reports that development continues on Marvel's Iron Man, the next Star Wars Jedi game, and a Sims project codenamed "Project Evergreen," while EA Sports titles and Battlefield 6 and Apex will continue to receive support. The article suggests EA's capacity to fund less mainstream development may be limited.
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