With federal regulators nearing a decision on Saudi Arabia’s Public Investment Fund’s proposed $55 billion acquisition of Electronic Arts (EA), the gaming company has announced another wave of layoffs. These layoffs impact employees in customer support, trust and safety, recruitment, and information technology. As the European Union’s regulators prepare to finalize their terms of the deal, U.S. regulators are edging closer to their verdict as well.
Layoffs have become a recurring narrative in the gaming industry. Thousands of developers, artists, engineers, quality assurance personnel, and support staff have lost their jobs due to publisher consolidations and reorganizations aimed at boosting profit margins. The recent layoffs at EA particularly affected personnel involved in player support, community moderation, and trust and safety systems. While such roles may not capture headlines, their absence is quickly felt by players.
Having engaged with fellow gamers as a member of the Players Alliance, I’ve encountered widespread frustration with the industry’s current trajectory. Concerns range from layoffs to increasing prices, subscriptions, and microtransactions that give an impression of constant monetization pressures. A common concern among gamers is a feeling that decision-makers are out of touch with the gaming communities.
This growing disconnect has led to increasing opposition to EA’s proposed acquisition by nearly 100,000 gamers across the nation. Senators Elizabeth Warren and Richard Blumenthal have urged scrutiny of this transaction, citing potential issues of foreign influence and the involvement of Saudi Arabia’s Public Investment Fund. Additionally, over 40 House Democrats have asked federal regulators to consider the acquisition’s implications for labor and competition.
Ownership structures not only impact investors but also influence workers, consumers, and communities. Supporters of the acquisition argue that new ownership could bring resources and stability. However, regulators should examine the track record of similar acquisitions across industries. These often involve layoffs, higher consumer prices, and aggressive monetization strategies, prioritizing short-term financial results over long-term investments and user experiences.
The game industry has increasingly leaned on subscriptions, premium upgrades, and microtransactions, creating a perception that players are now viewed more as revenue sources rather than customers. The Federal Trade Commission stresses that competition policy should factor in effects on labor markets, not just consumer prices. This is crucial in gaming, where consolidation typically impacts employees and creative teams before appearing on financial records.
Equally important is the role of the Committee on Foreign Investment in the United States. Congress established the committee to scrutinize transactions where foreign government-backed entities seek influence over significant American companies. While EA may not be a defense contractor, it is a globally influential entertainment company with over 100 million monthly users.
Whether regulators align with the concerns raised by Warren, Blumenthal, and House Democrats matters less than if they perform a thorough public review. The implications of this transaction surpass a single company, touching on broader issues of consolidation, labor conditions, consumer welfare, and the influence of financial institutions shaping essential cultural industries.
In gaming communities, there is no expectation for regulators to make decisions solely based on gamer preferences. However, regulators should assess whether this acquisition will address or aggravate existing industry issues. Amid ongoing layoffs and growing consolidation, coupled with increasing pressures on workers and consumers, it appears challenging to justify another large private-equity-backed acquisition. Consequently, the Federal Trade Commission and the Committee on Foreign Investment in the U.S. should scrutinize this transaction critically. Should evidence support the concerns of gamers, workers, and lawmakers, they ought to reject the acquisition.
Author: Otis East, Member of the Players Alliance.