Saudi Arabia’s PIF reportedly eyes Unity after EA

The investment consortium that recently acquired Electronic Arts for $55 billion is reportedly setting its sights on another major gaming industry player: Unity Software, the developer behind the widely-used multiplatform game engine.

According to Reuters, Saudi Arabia's Public Investment Fund (PIF) and investment firm Silver Lake are pursuing the acquisition. Silver Lake already holds a substantial stake in Unity, owning approximately 8% of the company following a $400 million investment made in 2017. The firm's leadership also maintains a board position at Unity, creating a potential conflict of interest in any sale negotiations.

The reported valuation for Unity stands at around $25 billion, though the company's recent financial performance may influence discussions. Unity's latest earnings report showed stronger-than-expected profits, marking a significant turnaround for the engine maker. The company posted its first quarterly profit on a generally accepted accounting principles basis since its public debut in September 2020, driven partly by growth in its Vector advertising platform powered by artificial intelligence.

Unity has undergone substantial changes since the controversial Runtime Fee announcement that sparked industry backlash. The engine has expanded its capabilities, including improved integration with competing platforms like Unreal. These improvements have contributed to the company's improved financial trajectory and market position.

The potential acquisition would represent another major consolidation move in the gaming industry. The EA deal resulted in significant workforce reductions and left the company carrying $18 billion in debt following the acquisition. Industry observers have expressed concerns about the accelerating pace of consolidation in gaming, with major publishers and technology companies increasingly being absorbed by large investment firms and sovereign wealth funds, potentially leading to widespread job losses across the sector.