Saudi Arabia’s Public Investment Fund (PIF) just got one step closer to acquiring Electronic Arts in a massive $55 billion deal. The European Commission approved the PIF's purchase of EA under the EU Merger Regulation, arguing that it doesn't warrant competition concerns. The Commission justified its decision as follows:

The transaction relates primarily to the production and distribution of video games for mobile devices, PCs and consoles, as well as the organisation and commercialisation of video game competitions, commonly referred to as electronic sports events.

The Commission concluded that the notified transaction would not raise competition concerns, given its limited impact on competition in the markets where the companies are active. The notified transaction was examined under the normal merger review procedure.

While the PIF's deal won’t close immediately, the European Commission was one of the last major roadblocks in its way. If the purchase does pass, it will be the largest private leveraged buyout in history (an acquisition done mostly with borrowed debt), and the second largest deal in video game industry history after Microsoft’s acquisition of Activision Blizzard (a deal that arguably hasn't gone well, given that Microsoft just laid off over 3,000 employees).

The transaction, which also involves private equity fund Silver Lake and Jared Kushner’s Affinity Partners investment firm as buyers, is Saudi Arabia’s latest foray into the video game industry. The PIF owns Savvy Games Group and has acquired stakes in major companies like Activision Blizzard, Capcom, Embracer Group, Nintendo, and Take-Two. It also owns a 97% stake in publisher SNK, which released Fatal Fury: City of the Wolves last year.

While the Saudi Arabian government’s official stance is that it entered the gaming industry to further diversify its oil-dependent economy, many have seen the move as directly analogous to its “sportswashing” efforts. The country has a poor global reputation due to widespread human rights abuses and alleged international crimes like the assassination of Washington Post columnist Jamal Khashoggi. To improve its image, the country has financed sports leagues, such as the Saudi Pro League and LIV Golf. It's now arguably doing the same with video games, so that gamers come to associate Saudi Arabia with entertainment instead of facilitating horrific work conditions for migrant laborers and enforcing anti-LGBTQ laws.

Many players aren't falling for the move. Last week, the speedrunning charity organization Games Done Quick (GDQ) backtracked on a sponsored event it was holding with Metal Slug publisher SNK for the series’ 30th anniversary. However, GDQ canceled the stream partway through after being called out on social media for partnering with a company owned by the PIF.

While EA leadership said that the company will “maintain creative control” under its new owners, there are reasons to doubt this claim. The Saudi Arabian government appears to have influenced Fatal Fury: City of the Wolves' development, as the game included ridiculous guest characters like soccer player Cristiano Ronaldo and DJ Salvatore Ganacci, whose inclusion only makes sense given their Saudi ties (Ronaldo played in a PIF-funded league, and Ganacci has done shows in the country). If the PIF's purchase of EA goes through, we'll see how long the company's independence holds out.