By Dan Gallagher

Electronic Arts may finally have a hit combat game on its hands. That may make this the ideal time for it to hit the "eject" button.

The company more widely known as EA is going private in a $55 billion deal. A group of investors including private-equity firm Silver Lake and Saudi Arabia's Public Investment Fund will pay $210 per share in cash for the videogame publisher. That represents a 25% premium to the last closing stock price before The Wall Street Journal reported on the deal talks Friday before the market closed.

It is also a hefty discount to the 45% premium Activision Blizzard landed in early 2022, when Microsoft announced plans to buy the game publisher for $68.7 billion. Activision owns the blockbuster "Call of Duty" franchise and other popular games, but it was struggling at that point with internal drama and the disappointing quality of the latest release of its flagship shooter title. That hit the stock and created an opportunistic window for Microsoft, which saw Activision's catalog as a good way to take their game-subscription and streaming businesses to the next level.

For EA, this looks more like getting out while the getting is good. The company's stock has been picking up steam over the last few months on strong buzz about "Battlefield 6," the latest iteration of an 18-year-old combat shooter franchise. The game, which is set for release on Oct. 10, comes after the last two titles in the franchise misfired, generating disappointing critic scores and lower-than-expected sales.

Wall Street expects the new game to do better; analysts for Jefferies and Citigroup both issued reports Friday before the buyout news that see the title surpassing EA's expectations. Expectations for "Battlefield 6" are in fact strong enough that several analysts are wondering why EA would take a buyout deal now.

"We can certainly understand why EA's management and board might want to monetize the company's value," Doug Creutz of TD Cowen wrote in a note to clients over the weekend, before the deal's formal announcement. "What makes less sense is why they would want to do it at this time and at this price." He suggested investors should hold out for a $60 billion valuation.

But the harsh truth of the videogame business is that one hit doesn't guarantee another. And even bulletproof franchises can get some painful knicks. EA Sports FC -- the company's blockbuster soccer franchise once known as FIFA -- saw a temporary dip in player engagement earlier this year. EA's disclosure of that trend sparked the biggest single-day drop for the company's stock price in nearly 17 years.

And even if "Battlefield 6" turns out to be strong, it could still hit a wall when the much-anticipated "Grand Theft Auto VI" from Take-Two Interactive launches in May of next year. That game's delay from an originally planned fall release created a valuable window for EA to get "Battlefield" out. But hopes for the new Grand Theft Auto are so high that competing action titles could still see a drop in engagement. Wall Street expects $4.3 billion in combined retail sales and online recurring revenue for the Grand Theft Auto franchise in Take-Two's fiscal year ending in March of 2027, according to consensus estimates from Visible Alpha.

Even Grand Theft Auto's success isn't assured. But the market for high-end videogames has become one of fewer bets that have to hit much bigger, and sustain that trajectory. The biggest value in games these days comes not from their retail launch but the continuing revenues generated through subscriptions, advertising and microtransactions. EA's stock price had already jumped to a new all-time high last month on hopes for "Battlefield 6." Betting that the game would become a massive and ongoing success would be a gamble, especially when the buyout offer for EA represents a sure thing in hand.

Write to Dan Gallagher at dan.gallagher@wsj.com

(END) Dow Jones Newswires

September 29, 2025 11:54 ET (15:54 GMT)

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