Silver Lake + PIF + Affinity Partners takes EA private at $50bn valuation
Silver Lake also took Endeavor private for $25bn earlier this year - can someone explain the deal rationale for both? Don't see the value especially from the perspective of an LBO - there is no way you can improve operational efficiency by that much to justify such a large investment. Obviously there's something I'm not understanding, hoping ppl with much more experience than I can shed some light on this. Thanks
Crazy aura. Also isnt Endeavour a re-take private so it wasnt as big of a lift. Would imagine PIF putting in a hefty chunk at a cheap cost of capital for sportswashing purposes
This deal looks absolutely retarded, I love it
Don’t want to sound too naive but AI next step - besides robotics - is in fact virtual reality, and the jump to highly functional/commercial VR should begin by games. This is what Demis H. precisely envisioned even years before Deepmind and etc
Think Egon’s play is not only financial (or strategic due to PIF involvement etc) but actually VERY visionary, which of course could go south and quickly given the 20bn balance sheet, perhaps someone involved in the transaction could enlighten us with a completely different storyline but still, I’m sticking with my thoughts, we’ll see how this play out by the end of the decade
Fair enough, I will take the other side of that one. Looks like they bet the farm at peak valuations, and unclear on the impact of AI on video games publishers (certainly has done 0 since 2022).
Agreed that video games data is an incredible goldmine for AI but really unclear how you can monetize it at this stage.
The only question mark from me is the angle with PIF and their entertainment strategy etc, might provide them a good exit route to even dumber money.
Been seeing Silver Lake’s name everywhere: Intel’s Altera, TikTok acquisition, Endeavor, and now EA (which is set to be the biggest LBO of all time). Big moves. I guess EA, whose games already have an abhorrent # of micro transactions, will have even more now 🙃
Its because they are tight with the current administration lol
dont wanna be that guy but whenever PE broke previous records for doing the largest LBO, the economy went downhill within the next 12-24 months
I’ll take a guess and say the main thesis was "Gaming + AI = money printer"
so basically a bet that 1) AI can replace a lot of what current game developers do and 2) do it faster, so you cut costs and push out new titles quicker and best case scenario 3) make games with embedded AI elements, which is probably revolutionary for gaming
the play might be to ride that wave for a few years + some homeruns in-between until customer enthusiasm fades from the oversaturation of constant releases/past first AI games - but at that point you're long gone
might look overvalued, but probably was FOMO i.e. being positioned before the gaming and AI combo takes off (aka first entrant move)
Nah i think the real thesis is MBS and Jared Kushner likes to play fifa so SLP doing them a favor to get tiktok at a ridculously low valuation in return
EA already pushes out annual titles. Can’t wait to see the Ai, micro transaction filled slop they push on the market
What partner led this deal + was it the same one as TikTok and Endeavor?
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This is exactly like the Txu deal - a zero. Ai will make it easy for millions of fans to make the games they want. Most will be terrible but some will be better than what EA makes. JPM better sell off all the debt.
del
Only thing that would've been more interesting to me is if they did it to MSTR. That might vaguely make more sense than this...
Edit: Wait the Saudis now own a woke gaming company the meme just got better nvm thank you Silver Lake
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