Do EA buyout talks hint at bigger industry troubles?

Core Viewpoint - Electronic Arts (EA) is reportedly in talks to go private, reflecting broader concerns among executives about the future of the video game industry as it shifts towards consolidation [1] Industry Trends - The video game industry has experienced a shift where gamers are increasingly sticking with old favorites rather than purchasing new titles, which has implications for revenue generation [1] - Following a period of rapid growth in the 2010s and during the pandemic, the current trend indicates a potential decline in new game purchases [1] Company Performance - In fiscal year 2025, 75% of EA's revenue is expected to come from live services rather than new game purchases, highlighting a significant change in revenue sources [1] - Analysts suggest that the industry is moving away from innovation towards a model where players spend repeatedly on the same games [1] Valuation Insights - The reported $50 billion price tag for EA may be viewed by executives as the company's "peak valuation," as the industry enters a phase where profits may rise but valuations could decline [1]