With the Purchase of EA, Saudi Arabia Wields Soft Power With a Game Controller
The $55 billion acquisition of Electronic Arts—reportedly brokered by Jared Kushner, of all people—is the kingdom’s latest investment in sports and entertainment
In October 2019, an esports pro player known as Blitzchung, a native of Hong Kong, was competing in a high-profile Hearthstone tournament hosted by the game’s publisher, Blizzard Entertainment, in Taipei.
Recall the contemporary geopolitical context: Beijing had recently taken several worrisome steps to weaken self-rule in Hong Kong and potentially absorb the autonomous region into Chinese rule—a betrayal of China’s long-standing policy of “one country, two systems,” and also an echo of Beijing’s concurrent threats to the continued sovereignty of Taiwan. For much of 2019, millions of people were turning out for massive protests in Hong Kong, including an especially disruptive three-day sit-in at HKG, one of the world’s busiest airports. The protests enjoyed broad popular support (for whatever that’s worth) in the U.S., from anti-communist conservatives, and from pro-democracy leftists.
Such was the state of East Asia when Blitzchung joined two shoutcasters on a livestream of the Hearthstone Grandmasters in Taipei, lowered his face mask, giggled into his webcam, and, in Cantonese, shouted the revolutionary slogan: “Liberate Hong Kong, the revolution of our times!”
The subsequent rebuke of Blitzchung was as swift as it was strange, coming not from the Chinese government but rather from Blizzard, a company founded by Americans and based in Santa Monica, California. Within a day, Blizzard fired the two shoutcasters, banned Blitzchung from the tournament, reclaimed $10,000 in prize money that he’d already won, and further barred Blitzchung from later tournaments in the series for one year. This punishment immediately struck many observers as a severe overreaction, and Blizzard’s motivations seemed obvious enough: Tencent, the Chinese tech and media conglomerate that’s widely seen as a soft power projection of Chinese state interests, held a minority stake in Blizzard Entertainment’s parent company, Activision Blizzard. (Until recently Tencent was also a major stakeholder in North Carolina–based Epic Games, publisher of Fortnite.) The ban was a matter of appeasement.
This little gaming livestream snafu soon snowballed into a cause célèbre, as journalists and streamers bombarded the company with criticism and players contemplated boycotts of Hearthstone, Overwatch, and World of Warcraft. A couple dozen employees staged a walkout at Blizzard’s work campus in Irvine, California. The writer Dylan Curran, in a column for The Guardian, urged gamers to form a united front against a creeping authoritarian pressure that had also recently stifled the NBA. Curran wrote, “We should all be deeply worried about how tied up western companies have gotten with authoritarian regimes.”
On Monday, Electronic Arts—storied publisher of Madden NFL, EA Sports FC (formerly FIFA), and Apex Legends, among many other massively popular titles—announced an agreement to be acquired for $55 billion in cash put up by a consortium including the Public Investment Fund of Saudi Arabia. (PIF currently holds a 9.9 percent stake in EA.)
The deal was reportedly brokered by President Donald Trump’s son-in-law, Jared Kushner, through his own investment firm, Affinity Partners. It will be the largest leveraged buyout in Wall Street history. It will take EA private.
This is a strange waypoint in the long and at times frustrating history of Electronic Arts. As a steward of must-buy titles, EA is rather maligned among gamers—the company is generally associated with the mismanagement of long-running franchises (the annual sports league titles, especially) and the proliferation of microtransactions in free-to-play games such as Apex Legends. There’s a sense, in other words, that EA can’t get much worse, as far as anti-consumer behaviors go.
Two years ago, Microsoft’s $69 billion takeover of Activision Blizzard drew a lot of scrutiny and a lot of buzz, given the self-evident significance and the well-established competitive dynamics of all the brands involved: Microsoft, Sony, Activision, Blizzard, Call of Duty, Nintendo, etc. It raised questions about the state of the console wars, the fate of Call of Duty, and the sustainability of big-budget video game development at independent studios. The big buyout of EA is a very different story with much more ambiguous implications. There’s the usual dreading of layoffs. There’s some vague speculation about the new owners potentially “pivoting to AI,” after EA previously expressed (in an SEC filing earlier this year) some trepidation about “social and ethical issues” as well as the potential for “legal and reputational harm” by doing so. There’s the sense that EA is an old and inglorious brand being dragged rather abruptly into a new era.
Still, the specifics of this new arrangement are more than a little mind-boggling, not to mention distressing: Saudi Arabia, in collaboration with Jared Kushner, of all people, buys the world’s sixth-biggest video game company. This is, unmistakably, a cultural coup for Saudi Arabia, as led for the past several years by the Crown Prince Mohammed bin Salman, a savvy driver of his kingdom’s modernization. The PIF has ingratiated Saudi Arabia into worldwide sports via WWE, the UFC, LIV Golf, F1, and the Premier League; into video games through investments in Nintendo, Epic Games, and, of course, EA. Just this past week, Dave Chappelle, Bill Burr, and a dozen other high-profile comedians from the U.S. headlined the Riyadh Comedy Festival—to considerable backlash.
It is easy to see the Riyadh Comedy Festival and all these other splashy activations as the reputational laundering of an authoritarian regime responsible for state sponsorship of terrorism, a thoroughly and often ruthlessly repressive domestic political climate, and the gruesome assassination of Washington Post contributor Jamal Khashoggi at the Saudi consulate in Istanbul in October 2018. These investments represent an inspired pivot from an oil-based economy to a leisurely one, as much as they also advance a conspicuous softening of the global portrayal of Saudi Arabia. This isn’t a country of hit squads, corporal punishment, and mysterious purges. This is a country of ubiquitous Starbuckses, pay-per-view spectacles, and perfumed storefronts for luxury brands.
Every subculture of sports and entertainment, it seems, will sooner or later reckon with the ever-expanding influence of Saudi Arabia. Many won’t care, and will see any overly insistent efforts to underscore the kingdom’s dire record on human rights as overly self-righteous and, in any case, pointless. Some will care, but will inevitably want for alternatives. This ethical battle is already lost, in some sense. EA is fait accompli.
Six years ago, the Blitzchung saga culminated with Blizzard’s then-president, J. Allen Brack, blogging a somewhat scatterbrained non-apology in which he pledged to release the prize money withheld from Blitzchung but nevertheless reaffirmed the company’s objection to his remarks as inappropriate for the time and place. “Our relationships in China had no influence on our decision,” Brack wrote. The backlash to Blizzard then fizzled, and the question of gaming culture’s full capacity for principled resistance—for something more substantial than the outpouring of critical tweets—went unanswered.
Under new management, EA will perhaps pose the question to players once again, sooner or later, at an esports tournament or a gaming expo or, alternatively, with some controversial release. Gamers have learned to live with microtransactions, as scummy as they might be. They’ll now presumably learn to live with something still more pernicious, as long as the games launch on time.
