From real sport to esports - why Saudi Arabia spent $55bn on EA

Depending connected really you spent aliases are spending your younker (and possibly ample chunks of your big years) nan building "EA Sports - it's successful nan game" is astir apt ingrained successful your memory.

And pinch nan blockbuster announcement that Electronics Arts is being sold for $55bn (£41bn), well, EA is successful nan news.

Noted, not arsenic catchy.

But support successful mind nan gaming institution being sold for specified an astronomical magnitude is not nan superior logic nan waste is simply a basking taxable of conversation.

That has been reserved for wherever nan money is coming from.

EA's caller owners will beryllium a consortium spearheaded by Saudi Arabia's Public Investment Fund (PIF), whose portfolio includes Newcastle United, nan LIV Golf franchise and a scope of boxing events.

The takeover of nan Premier League club, nan finance successful boxing and nan creation of nan breakaway play tourney were met pinch an abundance of scrutiny.

And erstwhile you see that nan EA woody is 11 times nan PIF's finance successful play and 180 times nan costs of Newcastle, it is possibly not astonishing that PIF's acquisition of 1 of nan biggest gaming companies successful nan world has besides raised a fewer eyebrows.

BBC Sport assesses nan record-breaking takeover, what it intends and whether it signals a alteration successful strategy aliases a wide diversification of PIF's business interests.

"It's monolithic news successful position of Saudi Arabia's soft powerfulness strategy. EA is nan cleanable institution for what Saudi Arabia wants to execute successful position of its influence," George Osborn, editor of Video Games Industry Memo, told BBC Sport.

"For Saudi Arabia it's an tremendous win. Whether it is for everyone else, that's a different question."

The Saudi Arabian authorities has spent years denying claims of 'sportswashing' - sponsoring aliases hosting sporting events to beforehand a affirmative nationalist image and distract attraction from quality authorities issues.

Prominent critics of nan state often constituent to its curen of women, LGBT authorities and usage of nan decease penalty.

Osborn said he believed nan state-funded PIF making specified a immense measurement into nan gaming manufacture was nan latest measurement by Saudi Arabian officials to put guardant their narrative.

He said: "Let's say, for example, a mum goes to nan supermarket and picks up a transcript of EA Sports FC disconnected nan shelf.

"They're not reasoning astir nan geopolitics. They are conscionable reasoning of fun. And this is nan brilliant of Saudi Arabia's strategy - that nan state becomes associated pinch fun.

"They recognise that video games person taste influence. By buying these companies, they are attracting group to their origin for nan authorities down this."

It is worthy noting that nan woody for PIF to get EA is yet to beryllium officially approved by nan applicable authorities.

The consortium besides includes Silver Lake and nan institution Affinity Partners, led by Jared Kushner, US President Donald Trump's son-in-law.

This is not PIF's first task successful nan gaming assemblage - successful fact, it is already heavy involved. As good arsenic antecedently owning an estimated 9-10% of EA, PIF besides purchased companies to unafraid ownership of nan Pokemon Go and Monopoly Go games.

EA has a wide-ranging portfolio of games. It is responsible for creating best-selling titles including Apex Legends, Battlefield, Need for Speed and nan Sims.

It is besides nan makers of EA Sports FC - antecedently known arsenic Fifa - arsenic good arsenic sports games connected nan NFL, NBA, UFC and F1.

Its shot titles person sold 325 cardinal copies since 1993, while nan Sims has sold 200 cardinal and Need for Speed much than 150 million.

"With this deal, it's not conscionable a spot astatine nan array immoderate much - it's control," Osborn said.

"When you've sewage control, you've sewage nan expertise to really thrust nan guidance of that business towards your goal.

"That's what nan Saudi authorities is going to beryllium willing in."

The woody would return EA private, meaning each its nationalist shares will beryllium purchased and it will nary longer beryllium traded connected a banal exchange.

There person been concerns that nan woody would consequence successful $20bn of indebtedness and that nan revenues of games would beryllium needed to work this.

The acquisition value besides put a important 25% premium connected nan marketplace worth of EA, valuing it astatine $210 per share.

While nan motive for PIF's acquisition of EA mightiness beryllium up for debate, nan country's request to diversify its economical income is not.

It is estimated that 40% of Saudi Arabia's wealthiness is from nan waste of lipid and gas. And pinch nan quickly changing attitudes towards nan usage of fossil fuels, location is an acceptance that different gross streams are vital.

"What nan rulers of Saudi Arabia person realised is if group don't spot you arsenic being a morganatic and trustworthy personnel of nan sporting and business communities, past they don't prosecute pinch you," said Prof Simon Chadwick, an master successful athletics and geopolitical system astatine Emlyon Business School successful France.

Saudi Arabia's lucrative finance successful nan Saudi Pro League (SPL), which features Cristiano Ronaldo, Sadio Mane and Karim Benzema, is often good publicised. So excessively is nan nation's hosting of awesome boxing, mixed martial arts and snooker events.

Yet its task into esports has gone comparatively unnoticed by many.

However, Saudi Arabia has hosted awesome tournaments, including nan Esports World Cup, and it will besides big 2027's planned Olympic Esports Games.

"Saudi Arabia is 1 of very fewer countries successful nan world that has an charismatic authorities argumentation aimed astatine building its esports economy," Prof Chadwick said.

"Partly that is owed to a very youthful organization - 70% aged nether 35 years old.

"Everybody's sewage a mobile phone. Everybody was calved and brought up pinch YouTube and everybody was calved and brought up pinch console gaming and pinch esports.

"In immoderate respects, what nan authorities is doing is they're catering for nan needs of nan population."

As good arsenic power complete nan EA gaming catalogue, PIF now has a spot astatine nan array successful 1 of nan astir profitable sectors of nan intermezo industry.

There are immoderate who judge specified powerfulness could yet lead to Saudi Arabia having a cardinal opportunity successful not only wherever games are made but wherever hardware for illustration consoles and accessories are too.

Such powerfulness could consequence successful countries and companies who antecedently refused to prosecute being faced pinch reliable decisions connected whether to alteration their stance.

Nick Hurley, co-founder of Guildford Games Ltd, said nan announcement of nan woody is further impervious that Saudi Arabia intends business and is consenting to put its money wherever its rima is.

"The EA buyout is nan largest buy-back successful Wall Street history and ought to really turbo-charge EA for early maturation pinch nan superior it will deliver," he said.

"It really underlines nan committedness successful nan Middle East to a sports/leisure strategy pinch an oculus connected nan business opportunities that AI is expected to present successful position of accrued leisure time.

"EA has travel a agelong measurement since it purchased Bullfrog successful Guildford successful 1995, and this ought to guarantee its spot successful nan pantheon of interactive games and sports."

As a pastime, gaming - overmuch for illustration athletics - whitethorn person been an flight from nan civilized dilemmas and regular problems group faced.

But, arsenic nan world becomes much connected, it seems specified escapism cannot flight nan attraction of immoderate of nan causes.