GREEN MAN ON A MISSION


The Disappearing Public Gaming Sector (or why EA’s $55bn Buyout Is Bad News for the Industry)


Paul Sulyok, Founder and CEO, Green Man Gaming


he record $55 billion leveraged buyout of Electronic Arts (EA), the largest in history, might look like a sign of confidence in gaming. In reality, it is another warning signal. Taking EA private represents a contraction of the public gaming ecosystem, and that is bad news for everyone who cares about the long-term health and capital flow into our industry.


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Just two years ago, Microsoft’s $69 billion acquisition of Activision Blizzard marked the biggest-ever deal in gaming. Now, with EA’s removal from the stock market, we are seeing the investable public gaming sector shrink further. What was once a vibrant and expanding ecosystem of publicly traded video game companies is now steadily eroding.


A SHRINKING PUBLIC UNIVERSE The public gaming universe includes global leaders such as Nintendo, Roblox, Take-Two Interactive, Capcom, Nexon, Square Enix, Krafton, and CD Projekt — together worth roughly $390 billion in market capitalisation. The removal of Activision and EA alone represented $124 billion from that total. By any measure, that is a major contraction. And the impact goes far beyond two companies.


THE DISAPPEARING ANALYST COVERAGE Every time a pure-play video game company disappears from the public market, it means fewer equity analysts covering the sector. Fewer analysts mean less research, and less research means less attention from fund


managers. The less coverage there is, the less capital is allocated to the sector, creating a vicious cycle.


I have spoken to analysts who are


concerned that the shrinking number of listed gaming companies is already reducing the appetite of major funds to invest in the space. Large institutional investors rely on analyst coverage to understand where to allocate capital. When the index becomes too small to justify coverage, that capital moves elsewhere, into other industries like food or energy, which are perceived as deeper and more liquid.


A BROKEN GROWTH PATHWAY The problem does not stop at the top of the market. Public gaming companies play a crucial role in sustaining the entire ecosystem. When there is a thriving public market for video game stocks, private equity investors have a clear path to exit via IPO. In turn, venture capital investors have confidence that successful gaming start-ups can scale and eventually go public.


But when that pathway narrows, investment at every level dries up further. Fewer exits mean less incentive for VCs to back early-stage studios, and fewer opportunities for private equity firms to build mid-sized champions. Founders will continue to create new gaming ventures, but the broader ecosystem that allows them to grow and scale will wither.


A SECTOR IN RETREAT


Five years ago, the video games sector on public markets was large enough to attract


more dedicated coverage, institutional investment, and steady capital inflows. Today, with Activision and EA gone, the sector’s investable footprint is significantly smaller. That is not a healthy sign for an industry that should be leading the world in digital innovation and entertainment. When capital stops flowing into public gaming companies, the result is not just a less dynamic market, but a less innovative one.


WHY IT MATTERS


The long-term health of gaming depends on a balanced ecosystem, one where capital can flow freely from venture creation to public listing. Leveraged buyouts may serve short-term financial interests, but they starve the industry of vibrancy, scale, liquidity, and growth potential. Taking companies like EA private


removes them from public scrutiny, reduces the number of sector benchmarks available to investors, and discourages the next generation of studios from dreaming big.


The video game industry has always thrived on creativity and innovation. But without a robust public market that attracts research, capital, and confidence the risk is clear: a shrinking, less dynamic sector where the world’s largest, most creative entertainment medium becomes just another financial asset to be traded and taken private.


That is not the future anyone who loves this industry should want.


October/November 2025 MCV/DEVELOP | 39


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