After acquiring EA for $55bn earlier this year, Saudi Arabia and private equity firm Silver Lake are reportedly in the market for another massive video game company. And according to new reports, it's Unity.
Per Reuters, Saudi Arabia's Public Investment Fund (PIF) and Silver Lake - two major actors in the EA acquisition - are in talks to acquire the video game engine company for around $25bn. Silver Lake's Egon Durban already sits on the Unity Board of Directors, and the firm owns around eight percent of its shares already thanks to a $400m investment.
This $25bn valuation should be taken with a grain of salt for two core reasons. For one, it was decided prior to Unity's latest quarterly financial report, which included a 59% increase in strategic revenue year-over-year and net income of $122m. So this could propel the valuation upwards.
On the other hand, wider economic changes could have a detrimental effect. Reuters points out: "Strong growth in Unity's AI-powered Vector advertising platform helped it post its first quarterly profit on a GAAP basis since going public in September 2020." Given we've seen the generative AI sector take a major hit this week following the US midterm elections, it's possible companies using the tech may be viewed with more fiscal skepticism. Or, maybe this dip is just temporary. In short, take the $25bn valuation as a ballpark figure.
Unity has had something of an interesting past. There was of course the banana's runtime fee scandal of 2024 in which the company attempted to charge developers a fee on each game sale using the engine, which proved a PR nightmare and was quickly walked back.
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