The acquisition leveraged record of 55,000 million dollars of Electronic Arts (EA) by the sovereign Fund of Saudi Arabia and two other companies marks a turning point in the video game industry, since companies seek to capitalize on intellectual property (IP) through the fusion of platforms.
Despite being the world’s largest entertainment industry, the video game market is experiencing a post -Pandandemics recession, since consumers are reducing their expense in response to price increase, which forces companies and executives to look for other ways to take advantage of successful intellectual property.
One way to achieve this is through other media, such as cinema and television.
The acquisition of EA means that the new owners of the company, Silver Lake, the Public Investment Fund (PIF) of Saudi Arabia and Affinity Partners of Jared Kushner, will be made with titles such as “Battlefield”, “Apex Legends” and “The Sims”.
Lately, other companies were successful in adapting very popular video games to film and television franchises, while in past decades, such adaptations, such as “Doom” of 2005 or “Street Fighter: the legend of Chun-Li” of 2009, used to receive bad criticisms and fail in the box office.
The worldwide success of the Sony “The Last of Us” television series in 2023 promoted Hollywood studies and video game editors to give green light to the film and television adaptations of popular intellectual video game properties.
These include the “Fallout” series of Amazon Prime, a new season of “Arcane” by Riot Games, “A Minecraft movie” by Warner Bros. and the sequels of the movie “Super Mario Bros” by Nintendo and in addition to the “Mortal Kombat” film. “Call of Duty” is also expected to be adapted to the big screen in a production of Paramount Skydance.
EA, who prepares for the launch of the expected “Battlefield 6”, already announced last year his plans to associate with MGM Studios de Amazon to produce a film based on his simulation role play, “The Sims”.
“The long -term direction is clear, and the value of the intellectual properties of high -end video games does nothing but increase as the players continue to focus their attention on franchises and less popular games,” Raymond James analysts said.
Read more: the ‘Battlefield’ manufacturer, Electronic Arts, will be privatized with a 55,000 million -dollar record purchase
Video game adaptations also represent a financial risk
The PIF video game division, Savvy Games Group, acquired or made important investments in other video game companies such as Take-Two Interactive and Nintendo, and also bet strongly on the growth of other entertainment sectors, signing agreements to expand film rooms in the kingdom and acquiring a participation in the Japanese firm of Anai Co.
“PIF has shown a greater interest in entertainment assets with outstanding positions in popular culture. I anticipate that they will focus more on digital media and less on the printed ones, or on traditional film and television distribution models, such as traditional television and movie theaters,” said Jon Wakelin, partner of the technological strategy consultant Altman Solon.
Experts claim that, although paying large quantities to have large intellectual properties could be beneficial in the long term, high production and development costs could be a financial risk if they are not properly implemented.
For example, the Swedish Video Group embarrass embarked on a wave of acquisitions during the last three or four years, buying dozens of smaller studies and reinforcing its game portfolio. However, the bad criticism of great titles and the cancellation of projects affected the company, which led it to a division in three last year.
“Consolidating intellectual property during a downward market has its short -term benefits, but most of the time it ends up generating inefficiencies and a devaluation,” said Joost Van Dreunen, a video game professor at the Stern Business School of the University of New York.
With Reuters information
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