Why is Electronic Arts, one of the biggest names in the video game business, reportedly in talks to go private?
Bloombergโs Jason Schreier notes that video game companies are moving towards consolidation and that the deal could reflect EA executivesโ broader concerns over the future of the industry. Following a period of rapid growth in the 2010s and during the pandemic, Schreier said gamers in recent years have โtended to stick with old favorites rather than purchasing new titles.โ
This seems to be reflected in EAโs fiscal year 2025, with 75% of revenue coming from live services rather than new purchases. In fact, analyst and Spilt Milk Studios co-founder Nicholas Lovell told Schreier, โWeโre moving away from an era of breaking new ideas to people settling into the same games, spending money over and over again.โ
So Lovell suggested that EA executives might see the reported $50 billion price tag as the companyโs โpeak valuation,โ as the industry enters a period where profits continue rising but valuations start to fall.
