The debt service alone indicates there is a greater strategy for net new value creation here. I think sports betting is going to be an important piece of that. EA with support of existing PIF/Silver Lake/Affinity (Silver Lake’s OpenBet in particular) portfolio can generate an additional $1B+ in annual sports betting revenue to handle the debt service.
This is my theory as well. A year ago, EA was hyping investors on the potential around EA Sports' "predictive" tech:
..."we see a distinct opportunity to use our software in two profound ways. One, to generate predictive outcomes, running infinite cycles of plays with infinite dimensions, through our engines. Two, to visualize results in-engine which can then be used in creative ways by fans, partners and pros."
Sure sounded like they saw a lane into the lucrative sports betting market.
Given its reliance on, especially, sports IP, EA will always and forever look for new ways to monetize these assets. It’s a sunk cost to obtain all these licenses, so finding new revenue streams is key.
Agreed. This is a content purchase which will likely be operationalized along several other avenues, including sport broadcasting, esports tournaments, and sports betting.
I think you're on to something re: betting. With rules in the US loosening in the US, it's quite possible this becomes a new revenue stream for EA and PIF/Silverlake, etc
Have we seen instances of things being cut or silenced from other game companies SAVVY or PIF own or have controlling interest in? I wonder if SA could be an enemy in a Battlefield game. I remember when THQs Homefront had to change their enemy from China to North Korea, and they were not owned by a Chinese company
The other piece here is I would imagine ~%5 layoffs are coming for EA post privatization, which is something this industry does not need right now
The debt service alone indicates there is a greater strategy for net new value creation here. I think sports betting is going to be an important piece of that. EA with support of existing PIF/Silver Lake/Affinity (Silver Lake’s OpenBet in particular) portfolio can generate an additional $1B+ in annual sports betting revenue to handle the debt service.
This is my theory as well. A year ago, EA was hyping investors on the potential around EA Sports' "predictive" tech:
..."we see a distinct opportunity to use our software in two profound ways. One, to generate predictive outcomes, running infinite cycles of plays with infinite dimensions, through our engines. Two, to visualize results in-engine which can then be used in creative ways by fans, partners and pros."
Sure sounded like they saw a lane into the lucrative sports betting market.
Given its reliance on, especially, sports IP, EA will always and forever look for new ways to monetize these assets. It’s a sunk cost to obtain all these licenses, so finding new revenue streams is key.
Agreed. This is a content purchase which will likely be operationalized along several other avenues, including sport broadcasting, esports tournaments, and sports betting.
I think you're on to something re: betting. With rules in the US loosening in the US, it's quite possible this becomes a new revenue stream for EA and PIF/Silverlake, etc
Have we seen instances of things being cut or silenced from other game companies SAVVY or PIF own or have controlling interest in? I wonder if SA could be an enemy in a Battlefield game. I remember when THQs Homefront had to change their enemy from China to North Korea, and they were not owned by a Chinese company
The other piece here is I would imagine ~%5 layoffs are coming for EA post privatization, which is something this industry does not need right now
Great write-up Joost!
EA Terrorism, it's in the game!