EA’s $55 Billion Buyout and $20 Billion Debt Could Trigger Mass Layoffs and Studio Closures, Ex-BioWare Veteran Warns

EA is on track to get bought for a jaw-dropping $55 billion, and a former BioWare exec is looking at the math and seeing a lot of red pens. Mark Darrah, who spent decades inside the machine, says the $20 billion in debt attached to the deal is the part to watch — because debt has a way of forcing decisions nobody likes.

The deal, in plain English

Here is the setup: investment firms Affinity Partners and Silver Lake, plus Saudi Arabia's Public Investment Fund, are the buyers. The acquisition still needs the usual sign-offs — regulators and EA shareholders — but if it clears those hurdles, the plan is to close in the first quarter of EA's FY2027.

Darrah's read on the numbers

In a new video on his YouTube channel, Darrah is careful to say he is not a financial analyst, but he has shipped enough games to know how thin margins can get. He figures that if this goes through with that debt load, EA ends up in a risky spot where a small wobble could matter a lot. His back-of-the-napkin estimate: if interest rates tick up or a big release slightly underperforms, there is only about $100 million of cushion before the waterline starts creeping up.

'That is likely going to mean layoffs and studio closures.'

His logic is the usual private-equity playbook. Yes, there are some savings you can squeeze out just from changing the corporate structure and tightening operations — but not the hundreds of millions per year you would need to make that debt feel cozy. And EA, historically pretty conservative with money, would likely look at the biggest line item it has: people.

What gets cut, sold, or spared

This is where it gets a little inside baseball. Darrah points out that EA rarely sells its IP, partly because the executives who would greenlight that move are incentivized to avoid big swings. But incentives can change after a buyout. If the new overlords want cash fast, you suddenly start considering things that were previously unthinkable.

EA has a vault full of dormant franchises. Darrah suggests one scenario where EA bundles a bunch of those inactive IPs and sells them for, say, $100 million — not life-changing in the grand scheme, but that amount pays down a slice of debt instantly. He also floats the idea of offloading entire studios or divisions instead of just shutting them down. Keep the teams intact, pass them to a new owner, and pocket the proceeds.

He thinks EA Sports stays exactly where it is — that brand is a money printer with steady annual cycles. EA Entertainment, which handles the non-sports side, is less sacred. In Darrah's view, you could imagine the whole division getting sold to a deep-pocketed buyer like Sony. The deal has reportedly been percolating for a while, and he even speculates that EA's current structure may have been arranged with a move like that in mind.

The timeline, if this all happens

• Short term: expect layoffs across game teams and in support areas like finance and PR. The headcount drop would be swift and, yes, ugly.
• Medium term: potential studio closures, or entire studios/divisions and IP libraries getting sold. Painful, but some of those sales could end up being good for the games and teams long-term under owners who actually want to develop them.
• Long term: whatever is left of EA as a private company might be healthier, with financial expectations that match how the business truly operates — but getting there likely hurts.

Meanwhile, inside EA...

If you work there, you have probably already seen the internal line: leadership is telling employees there will be 'no immediate changes' to jobs after the buyout announcement. Emphasis on 'immediate.' That tracks with how these deals usually roll out — quiet at first, then the org chart starts moving.

Bottom line: none of this is confirmed until the deal closes, but if the debt lands the way Darrah describes, the next few years at EA could be very busy — and very bumpy.