How private equity buyouts hollow out game studios, as seen with BioWare

PC Gamer breaks down the leveraged buyout playbook: debt for the purchase lands on the acquired company, while the fund extracts assets, real estate and IP via sale-leaseback and fees. Amid BioWare's closure and 400 EA layoffs, the outlet notes PE-backed firms accounted for over 10% of US corporate bankruptcies in 2024.

• In a leveraged buyout, the acquired company's assets collateralize the debt taken to buy it
• Firms typically take 2% of assets annually plus 20% carried interest and monitoring fees
• PE-backed companies made up over 50% of 2024 bankruptcies with $500M+ liabilities
• Scum developer Gamepires announced layoffs eight months after its Splash Damage acquisition