Tech
What the US$55 billion Electronic Arts takeover means for video game workers and the industry
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.
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Tech
How Trump’s Plot to Grab Iran’s Nuclear Fuel Would Actually Work
President Donald Trump and top defense officials are reportedly weighing whether to send ground troops to Iran in order to retrieve the country’s highly enriched uranium. However, the administration has shared little information about which troops would be deployed, how they would retrieve the nuclear material, or where the material would go next.
“People are going to have to go and get it,” secretary of state Marco Rubio said at a congressional briefing earlier this month, referring to the possible operation.
There are some indications that an operation is close on the horizon. On Tuesday, The Wall Street Journal reported that the Pentagon has imminent plans to deploy 3,000 brigade combat troops to the Middle East. (At the time of writing, the order has not been made.) The troops would come from the Army’s 82nd Airborne Division, which specializes in “joint forcible entry operations.” On Wednesday, Iran’s government rejected Trump’s 15-point plan to end the war, and White House press secretary Karoline Leavitt said that the president “is prepared to unleash hell” in Iran if a peace deal is not reached—a plan some lawmakers have reportedly expressed concern about.
Drawing from publicly available intelligence and their own experience, two experts outlined the likely contours of a ground operation targeting nuclear sites. They tell WIRED that any version of a ground operation would be incredibly complicated and pose a huge risk to the lives of American troops.
“I personally think a ground operation using special forces supported by a larger force is extremely, extremely risky and ultimately infeasible,” Spencer Faragasso, a senior research fellow at the Institute for Science and International Security, tells WIRED.
Nuclear Ambitions
Any version of the operation would likely take several weeks and involve simultaneous actions at multiple target locations that aren’t in close proximity to each other, the experts say. Jonathan Hackett, a former operations specialist for the Marines and the Defense Intelligence Agency, tells WIRED that as many as 10 locations could be targeted: the Isfahan, Arak, and Darkhovin research reactors; the Natanz, Fordow, and Parchin enrichment facilities; the Saghand, Chine, and Yazd mines; and the Bushehr power plant.
According to the International Atomic Energy Agency, Isfahan likely has the majority of the country’s 60 percent highly enriched uranium, which may be able to support a self-sustaining nuclear chain reaction, though weapon-grade material generally consists of 90 percent enriched uranium. Hackett says that the other two enrichment facilities may also have 60 percent highly enriched uranium, and that the power plant and all three research reactors may have 20 percent enriched uranium. Faragasso emphasizes that any such supplies deserve careful attention.
Hackett says that eight of the 10 sites—with the exception of Isfahan, which is likely intact underground, and “Pickaxe Mountain,” a relatively new enrichment facility near Natanz—were mostly or partially buried after last June’s air raids. Just before the war, Faragasso says, Iran backfilled the tunnel entrances to the Isfahan facility with dirt.
The riskiest version of a ground operation would involve American troops physically retrieving nuclear material. Hackett says that this material would be stored in the form of uranium hexafluoride gas inside “large cement vats.” Faragasso adds that it’s unclear how many of these vats may have been broken or damaged. At damaged sites, troops would have to bring excavators and heavy equipment capable of moving immense amounts of dirt to retrieve them
A comparatively less risky version of the operation would still necessitate ground troops, according to Hackett. However, it would primarily use air strikes to entomb nuclear material inside of their facilities. Ensuring that nuclear material is inaccessible in the short to medium term, Faragasso says, would entail destroying the entrances to underground facilities and ideally collapsing the facilities’ underground roofs.
Softening the Area
Hackett tells WIRED that based on his experience and all publicly available information, Trump’s negotiations with Iran are “probably a ruse” that buys time to move troops into place.
Hackett says that an operation would most likely begin with aerial bombardments in the areas surrounding the target sites. These bombers, he says, would likely be from the 82nd Airborne Division or the 11th or 31st Marine Expeditionary Units (MEU). The 11th MEU, a “rapid-response” force, and the 31st MEU, the only Marine unit continuously deployed abroad in strategic areas, have reportedly both been deployed to the Middle East.
Tech
Amazon’s Spring Sale Is So-So, but Cadence Capsules Are a Bright Spot
The WIRED Reviews Team has been covering Amazon’s Big Spring Sale since it began at on Wednesday, and the overall deals have been … not great, honestly. So far, we’ve found decent markdowns on vacuums, smart bird feeders, and even an air fryer we love, but I just saw that Cadence Capsules, those colorful magnetic containers you may have seen on your social media pages, are 20 percent off. (For reference, the last time I saw them on sale, they were a measly 9 percent off.)
If you’re not familiar, they allow you to decant your full-sized personal care products you use at home—from shampoo and sunscreen to serums and pills—into a labeled, modular system of hexagonal containers that are leak-proof, dishwasher safe, and stick together magnetically in your bag or on a countertop. No more jumbled, travel-sized toiletries and leaky, mismatched bottles and tubes.
Cadence Capsules have garnered some grumbling online for being overly heavy or leaking, but I’ve been using them regularly for about a year—I discuss decanting your daily-use products in my guide to How to Pack Your Beauty Routine for Travel—and haven’t experienced any leaks. They do add weight if you’re trying to travel super-light, and because they’re magnetic, they will also stick to other metal items in your toiletry bag, like bobby pins or other hair accessories. This can be annoying, especially if you’re already feeling chaotic or in a hurry.
Otherwise, Capsules are modular, convenient, and make you feel supremely organized—magnetic, interchangeable inserts for the lids come with permanent labels like “shampoo,” “conditioner,” “cleanser,” and “moisturizer.” Maybe you love this; maybe you don’t. But at least if you buy on Amazon, you can choose which label genre you get (Haircare, Bodycare, Skincare, Daily Routine). If this just isn’t your jam, the Cadence website offers a set of seven that allows you to customize the color and lid label of each Capsule, but that set is not currently on sale.
Tech
Fellow Readers, Don’t Miss These E-Reader Sales
This is the older Kindle Scribe, but the price and features are the best you’ll get, especially when it’s on sale like this. I still reach for this model even though I have the newer third generation, and keep in mind the second generation will also get some of the newer software and experiences over time. With the sale, it’s half the price of the newer model.
If you’re already a Kindle reader and looking to upgrade, it’s likely because you want a new feature like a color screen. While the Kobo above is the better buy, if you want to stay in the Kindle ecosystem but add some color to your books, both the Colorsoft and Colorsoft Signature are on sale.
If you’re looking to spend as little as possible, the basic Kindle (11th generation) is still a great e-reader and is currently under $100. It can do almost everything the other Kindles can (except the Scribe) on a snappy black-and-white screen. It doesn’t have a warm front light either, but it’s still a great purchase for the price.
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