Electronic Arts is leaving the public stock market after 36 years and completing its delisting from the NASDAQ. The resulting debt burden of $18 billion puts management and the company under pressure.
The deal follows the perfect logic of a leveraged buyout. The existing shareholders are cashing in their shares for $210 per share and leave with bulging pockets. The tens of billions of dollars in debt don't end up in the new owners' accounts, but are directly saddled with the acquired company. EA now has to pay off its own acquisition.
An EBITDA of $1,5 billion does not cover the interest payments.
The price of the private settlement is high and is financed almost entirely through debt. The company is now burdened with a loan totaling 18 billion US dollars, generating annual interest payments of approximately 1,8 billion US dollars.
This contrasts sharply with the current operating result. According to industry expert Jason Schreier, the publisher currently generates an annual EBITDA of approximately $1,5 billion. While this result essentially covers the estimated annual interest burden, it leaves no financial leeway for investments, debt repayment, or unforeseen losses. That's the reality. Mathematics doesn't forgive PR spin.
Covering the interest burden requires terminations of employment contracts.
Industry analyses by Bloomberg indicate that development budgets, marketing expenditures, and workforces are all being cut. Companies that have to pay creditors are eliminating jobs. This is a common practice in debt-financed acquisitions.
That's the bittersweet twist to this historic $55 billion private liquidation. While old shareholders and investment bankers line their pockets, the workforce and the community bear the full burden of the interest payments.
Electronic Arts didn't delist from the stock market to gain creative freedom. The company simply made itself a slave to gigantic bank loans. Anyone who has to set aside hundreds of millions of dollars every year just to service debt loses any room for risk, bold ideas, or unprofitable passion projects.
Cost-cutting measures now dictate the program. On the menu are maximum monetization of established sports series, even more aggressive microtransactions, and the ruthless liquidation of departments that don't immediately generate maximum returns. Experiments are officially over. Cash flow is the only thing that matters.
Clarification (August 6, 2026): We have clarified the wording regarding interest coverage through EBITDA. The fundamental statement regarding the cost-cutting measures remains unchanged.
Things will get interesting with EA in the coming years, not to mention DICE is also affected. 😅
The gaming industry disgusts me now. The PS5 generation will be my last. After that, I'll only play retro, indie, and Nintendo games (as long as they don't become quite as bad as Sony and Microsoft).