Having snapped up Electronic Arts for close to $55 billion, Saudi sovereign wealth fund PIF and investment firm Silver Lake reportedly fancy another acquisition in the video game sector. According to Reuters, the two investors recently opened talks about a possible buyout of Unity, the company behind one of the industry's most widely used game engines. And guess what? The valuation floated during those talks is said to be somewhere around $25 billion.
For now, nothing has been signed and no deal has been announced. Unity has reportedly brought in an investment bank to weigh up the options available to it. The terms of any transaction could still change, or it may never happen at all, but the discussions are now under way, which means Unity is interested. The figure being mentioned is considerable all the same, since it exceeds Unity's market capitalisation, estimated at $21.5 billion following the publication of its latest financial results. Those results went down rather well on Wall Street, as Unity reported revenue of $622.1 million for its most recent quarter, up 32%, along with adjusted earnings of 44 cents per share. Growth in its advertising and game development businesses drove that healthy progress, with a special mention for Vector, its AI-based ad platform.
As for the investors, it's worth noting that Silver Lake already knows Unity very well indeed, having invested around $400 million in the company back in 2017 and still holding roughly 8% of its capital. Its boss, Egon Durban, also sits on Unity's board, which could force him to step back from internal discussions about a potential sale. The ties between the various players run deeper still: Scopely, owner of Monopoly Go!, and Niantic, the studio behind Pokémon Go, both use Unity's technology and belong to groups in which you'll find interests linked to PIF, Silver Lake and Affinity Partners.
Unity is coming out of a turbulent spell
It's also worth pointing out that Unity has been through several choppy years, not to say difficult ones, marked by waves of redundancies and a crisis of confidence with developers. Remember, in January 2024 the company announced it was cutting 1,800 jobs, around 25% of its workforce, and a few months earlier its boss John Riccitiello had stepped down following the row sparked by the plan to charge developers for every install of a game using the Unity engine. Faced with the industry's anger, the company first watered down the scheme before scrapping its controversial Runtime Fees for good in September 2024. A potential buyout by Silver Lake and PIF could therefore open a new chapter for one of the leading suppliers of game development tools. At this stage, though, the talks remain preliminary and there's no guarantee Unity will change hands. Then again, we also know PIF tends to see its ambitions through.
