r/masseffect • u/deanpmorrison • 8h ago

NEWS EA's Garbage Statement on the Closure

https://www.ea.com/news/building-eas-next-chapter

TL;DR

They're laying people off and canceling projects, and they're up their own ass about it

502 Upvotes

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u/Chorik 8h ago

20 BILLION debt says it all. It was almost inevitable. Unfortunately way more layoffs coming before the year ends. 

It will prob end up like Toy'R'Us levered buyout, Saudi fund will parcel out the skeleton of the company in few years

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u/KnG_Yemma 8h ago

20 billion in debt sounds so grossly irresponsible for a company as big as EA, how the hell does that even happen?

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u/Nemesis_Ghost 7h ago

Easy, you take out a massive loan to buy a company easily worth 2-3x that, then make your new company owe that debt.

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u/TheMadTemplar 7h ago

It was a leveraged buyout. Why they did it I have no clue, because it doesn't help EA at all, but it happens in big business. Basically, the company being purchased agrees as part of the acquisition to take on the responsibility of the debt from some of the loans required to purchase them. They will then need to both pay-off those loans to get out from under the debt and make money for their new owners. Best guess is that the prior owners got a massive payout from the acquisition, then dip out leaving the company with billions in new debt.

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u/delecti 1h ago

Why they did it I have no clue, because it doesn't help EA at all

The former shareholders all got to sell for a profit. "EA" was property, you don't consider how your car would feel if someone offered to buy it for a premium.

And like, it sucks, because EA also owned a lot of culturally important franchises, but none of that matters to the shareholders.

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u/Maximum__Mango 8h ago

I guess everybody already forgot about the Saudi's $55 billion leveraged buyout of EA with the help of Jared Kushner?

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u/TheRealJikker 7h ago

I think a lot of folks don't realize how much of that buyout was transferred in debt onto EA.

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u/TheWandererKing 8h ago

PEPPERIDGE FARM REMEMBERS. AND THINKS JARED IS A TRAITOROUS SNAKE

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u/blue_line-1987 5h ago

Well, that's a requirement for a position in that regime.

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u/pardyball 7h ago

Skydance's debt is even crazier

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u/_HGCenty 8h ago

Means they likely won't sell the IP for cheap.

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u/DasGanon 8h ago

And for that price nobody will pick up the pieces.

"I can spend x million dollars just to continue someone else's story? Just use that money to start from scratch or get a book's license for cheaper."

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u/EedSpiny 6h ago

OK. Who's with me on starting work on "E/C² Effect"?

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u/skyxsteel 7h ago

Maybe Microsoft… maybe.

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u/Halojib 7h ago edited 6h ago

Microsoft is done doing acquisitions until after it sees if the new direction of games that have been approved release.

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u/skyxsteel 6h ago

Let me dream dammit 😭

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u/DasGanon 6h ago

Microsoft "let's gut ID software and sell Doublefine" isn't a good choice right now either lol

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u/NohFyoochur 3h ago

And they did that to a studio that's actually shipping good games that they themselves cannibalized with game pass. No chance they save bioware let alone buy an IP they couldn't deliver on.

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u/SHansen45 6h ago

you spend x million dollars to make 4x million dollars

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u/OkEase1151 7h ago

Even then it’d just be one Private Equity group to another. At that point just let the devs start fresh with someone else or start their own thing.

Only legit question is if the Amazon show’s done too, that’s kinda the only other thing that can still drop at this point

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u/Halojib 7h ago

License agreements are probably more on the table than complete sell offs.

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u/MrLeHah N7 6h ago

The Toys R Us comparison is exactly it. They bought the chicken, they killed it, now they're going to sell the breast and bones until theres nothing left to pay off the hole they dug in the purchase. Rinse, repeat.