Electronic Arts (EA) is one of the world’s largest gaming companies. It has agreed to be acquired for US$55 billion in the second largest buyout in the industry’s history.

Under the terms, Saudi Arabia’s sovereign wealth fund (a state-owned investment fund), along with private equity firms Silver Lake and Affinity Partners, will pay EA shareholders US$210 per share.

EA is known for making popular gaming titles such as Madden NFL, The Sims and Mass Effect. The deal, US$20 billion of which is debt-financed, will take the company private.

The acquisition reinforces consolidation trends across the creative sector, mirroring similar deals in music, film and television. Creative and cultural industries have a “tendency for bigness,” and this is certainly a big deal.

It marks a continuation of large game companies being consumed by even larger players, such as Microsoft’s acquisition of Activision/Blizzard in 2023.

Bad news for workers

There is growing consensus that this acquisition is likely to be bad news for game workers, who have already seen tens of thousands of layoffs in recent years.

This leveraged buyout will result in restructuring at EA-owned studios. It adds massive debt that will need servicing. That will likely mean canceled titles, closed studios and lost jobs.

In their book “Private Equity at Work: When Wall Street Manages Main Street,” researchers Eileen Appelbaum and Rosemary Batt point to the “moral hazard” created when equity partners saddle portfolio companies with debt but carry little direct financial risk themselves.

The Saudi Public Investment Fund (PIF) is looking to increase its holdings in lucrative sectors of the game industry as part of its diversification strategy. However, private equity firms subscribe to a “buy to sell” model, focusing on making significant returns in the short term.

Appelbaum notes that restructuring opportunities are more limited when larger, successful companies—like EA—are acquired. In such cases, she says, “financial engineering is more common,” often resulting in “layoffs or downsizing to increase cash flow and service debt.”

Financial engineering combines techniques from applied mathematics, computer science and economic theory to create new and complex financial tools. The failed risk management of these tools has been implicated in financial scandals and market crashes.

Financialization and the fissured workplace

The financialization of the game industry is a problem. Financialization refers to a set of changes in corporate ownership and governance—including the deregulation of financial markets—that have increased the influence of financial companies and investors.

It has produced economies where a considerable share of profits comes from financial transactions rather than the production and provision of goods and services.

It creates what American management professor David Weil calls a “fissured workplace” where ownership models are multi-layered and complex.

It gives financial players an influential seat at the corporate decision-making table and directs managerial attention toward investment returns while transferring the risks of failure to the portfolio company.

As a result, game titles, jobs and studios can be easily shed when financial companies restructure to increase dividends, leaving workers with little access to these financial players as accountable employers.

Chasing incentives and cutting costs

The Saudi PIF has stated a goal of creating 1.8 million “direct and indirect jobs” to stimulate the Saudi economy. But capital is mobile, and game companies will likely follow jurisdictions that have lower wages, fewer labor protections and significant tax incentives.

Some Canadian governments are working to keep studios and creative jobs closer to home. British Columbia recently increased its interactive media tax credit to 25%.

The move was welcomed by the chief operations officer of EA Vancouver, who said “B.C.”s continued commitment to the interactive digital media sector…through enhancements to the … tax credit … reflects the province’s recognition of the industry’s value and enables companies like ours to continue contributing to B.C.”s creative and innovative economy.”

This may buffer Vancouver’s flagship EA Sports studio, but those making less lucrative games or in regions without financial subsidies will be more at risk of closure, relocation or sale. Alberta-based Bioware—developer of games including Dragon Age and Mass Effect—could be at risk.

Other ways of aggressively cutting costs might come in the form of increased AI use. EA was called out in 2023 for saying AI regulation could negatively impact its business. Yet creative stagnation and cutting corners through AI will negatively impact the number of jobs, the quality of jobs and the quality of games. That could be a larger threat to EA’s business and reinforce a negative direction for the industry.

Game players have low tolerance for quality shifts and predatory monetization strategies. Research shows that gamers see acquisitions negatively: development takes longer, innovation is curtailed and creativity is stymied.

Consolidation among industry giants may cause players to lose faith in EA’s product—and games in general, given the many other entertainment options that are available.

Creative control and worker power at risk

Some have raised concerns that the acquisition could affect EA’s creative direction and editorial decisions, potentially leading to increased content restrictions.

While it’s still unclear how the deal will influence EA’s output, experiences in other industries might be a sign of things to come. For instance, comedians reportedly censored themselves to perform in Saudi Arabia.

The acquisition may also have a chilling effect on the workers’ unionization movement. Currently, no EA studios in Canada are unionized. Outsourced quality assurance workers at the EA-owned BioWare Studio in Edmonton successfully certified a union in 2022, but were subsequently laid off. Fears of outsourcing, layoffs and restructuring could discourage future organizing efforts.

On the other hand, the knowledge that large financial players are making massive profits could galvanize workers, especially considering that before the buyout, EA CEO Andrew Wilson was paid about 264 times the salary of the median EA employee.

The deal certainly does nothing to bring stability to an already volatile industry. Regardless of any cash injection, EA remains very exposed.

This article is republished from The Conversation under a Creative Commons license. Read the original article.

The world’s largest cloud computing platform, Amazon Web Services (AWS), has experienced a major outage that has impacted thousands of organizations, including banks, financial software platforms such as Xero, and social media platforms such as Snapchat.

The outage began at roughly 6pm AEDT on Monday. It was caused by a malfunction at one of AWS’ data centers located in Northern Virginia in the United States. AWS says it has fixed the underlying issue but some internet users are still reporting service disruptions.

This incident highlights the vulnerabilities of relying so much on cloud computing—or “the cloud” as it’s often called. But there are ways to mitigate some of the risks.

Renting IT infrastructure

Cloud computing is the on-demand delivery of diverse IT resources such as computing power, database storage, and applications over the internet. In simple terms, it’s renting (not owning) your own IT infrastructure.

Cloud computing came into prevalence with the dot com boom in the late 1990s, wherein digital tech companies started to deliver software over the internet. As companies such as Amazon matured in their own ability to offer what’s known as “software as a service” over the web, they started to offer others the ability to rent their virtual servers for a cost as well.

This was a lucrative value proposition. Cloud computing enables a pay-as-you-go model similar to a utility bill, rather than the huge upfront investment required to purchase, operate and manage your own data center.

As a result, the latest statistics suggest more than 94% of all enterprises use cloud-based services in some form.

A market dominated by three companies

The global cloud market is dominated by three companies. AWS holds the largest share (roughly 30%). It’s followed by Microsoft Azure (about 20%) and Google Cloud Platform (about 13%).

All three service providers have had recent outages, significantly impacting digital service platforms. For example, in 2024, an issue with third-party software severely impacted Microsoft Azure, causing extensive operational failures for businesses globally.

Google Cloud Platform also experienced a major outage this year due to an internal misconfiguration.

Profound risks

The heavy reliance of the global internet on just a few major providers—AWS, Azure, and Google Cloud—creates profound risks for both businesses and everyday users.

First, this concentration forms a single point of failure. As seen in the latest AWS event, a simple configuration error in one central system can trigger a domino effect that instantly paralyzes vast segments of the internet.

Second, these providers often impose vendor lock-in. Companies find it prohibitively difficult and expensive to switch platforms due to complex data architectures and excessively high fees charged for moving large volumes of data out of the cloud (data egress costs). This effectively traps customers, leaving them hostage to a single vendor’s terms.

Finally, the dominance of US-based cloud service providers introduces geopolitical and regulatory risks. Data stored in these massive systems is subject to US laws and government demands, which can complicate compliance with international data sovereignty regulations such as Australia’s Privacy Act.

Furthermore, these companies hold the power to censor or restrict access to services, giving them control over how firms operate.

The current best practice to mitigate these risks is to adopt a multi-cloud approach that enables you to decentralize. This involves running critical applications across multiple vendors to eliminate the single point of failure.

This approach can be complemented by what’s known as “edge computing“, wherein data storage and processing is moved away from large, central data centers, toward smaller, distributed nodes (such as local servers) that firms can control directly.

The combination of edge computing and a multi-cloud approach enhances resilience, improves speed, and helps companies meet strict data regulatory requirements while avoiding dependence on any single entity.

As the old saying goes, don’t put all of your eggs in one basket.

This article is republished from The Conversation under a Creative Commons license. Read the original article.

As the winter months creep up on us, you may be looking for a new tumbler or travel mug to keep your coffee hot all day. You could certainly peruse our list of the best travel mugs, which is packed with fancy double-walled, vacuum-insulated options, but if you constantly have icy hands, you might consider scooping up the Ember Travel Mug 2+, which has an actual heater inside. It’s currently marked down by $40 at Best Buy, bringing the price down to just $160. While I did spot the reduced price at Amazon as well, at publication time the shipping date was a range of November 9-30.

While spending over $100 on a travel mug might feel like a stretch, the Ember lineup have internal warmers that keep your coffee or tea hot for hours on end. Unlike the popular home versions, the Travel Mug 2+ is a fully enclosed waterproof tumbler, so it’s perfect for taking on the road, or to your favorite outdoor activities. It has a great seal, which held up without dripping even when dropped into a crowded duffel bag.

With just the internal battery, our tester Pete Cottell managed to get over two hours of heat, which should keep a 16-ounce coffee at a toasty 135 degrees Fahrenheit for at least your morning commute. If you routinely drive even longer distances, there’s a separately sold car charger that will use the built-in 12V port to keep your liquids heated for as long as you’re stuck in the driver’s seat.

If you find yourself regularly losing your existing tumbler, and are worried about losing this more expensive version, the built-in Apple Find My support should give you some peace of mind. Not only can it help you find it when you’re craving a sip, but it can also let you know if you’ve left it behind, as long as you’re on an Apple device.

Overall the Ember Travel Mug 2+ offers a lot for its high price tag, and should appeal to daily coffee and tea drinkers, particularly those who regularly find themselves shivering during the winter. If that sounds like you, make sure to check out our gift guide specifically for people who get too cold and need to be warmed up.